NEW YORK, March 3, 2014 /PRNewswire/ -- Corvex
Management LP and Related Fund Management, LLC, whose separately
managed investment funds collectively own approximately 9.6% of the
outstanding shares of CommonWealth REIT (NYSE:CWH), today applauded
the report by Institutional Shareholder Services (ISS), a leading
independent proxy advisory and corporate governance advisory firm
who has recommended for the second time in nine months that
CommonWealth shareholders vote to remove the entire Board of
Trustees.
Keith Meister of Corvex and
Jeff T. Blau of Related issued the
following statement:
"This important endorsement from a leading independent proxy
advisory firm confirms that urgent change is 'necessary' at
CommonWealth and that our consent solicitation provides the only
real path to effecting change. We are not surprised that ISS
saw clearly through the Board's misleading claims and rebutted
nearly every major tenet of CommonWealth's case.
"After a year of obstruction and stall tactics by the Portnoys,
shareholders of CommonWealth finally have the ability to exercise
their charter-given rights and can vote to remove the entire Board
of Trustees, as recommended by ISS. By subsequently electing
a slate of highly qualified independent nominees, led by
Sam Zell, shareholders can choose
the path of aligned incentives and accountability critical to
building long-term shareholder value. We encourage all CommonWealth
shareholders to sign, date and return the Gold consent card
today."
As is its custom, CommonWealth has released a response that is
in our view a blatant distortion of the Board's record as compared
with the ISS report. Following is a side by side comparison
of the ISS analysis and the Board's misleading assertions:
|
CWH Misleading
Assertions
|
ISS
Opinion
|
|
"The CWH Board and
management have been executing a sound business plan…and this plan
is delivering value for all CWH shareholders…"[i]
|
"On balance it seems
clear – from the dismal relative and absolute shareholder returns
the company eked out before the dissidents' arrival, to the
dissidents' central and compelling argument that this
underperformance results from a misaligned external management
structure this board nonetheless continues to support, to the
overwhelming long-term evidence of this board's willingness to
unilaterally amend the bylaws in support of entrenchment rather
than accountability – that the dissidents have made a compelling
case that change at the board level is necessary."
|
|
"The Board
significantly enhanced CWH's corporate
governance…"i
|
"To breezily
reappoint [following the 2013 annual meeting] a nominee just
rejected by four out of five shareholders underscores the central
concern the dissidents have articulated: whether there is any
attentiveness within this board to the concerns of the owners,
rather than the managers, of the company.
The numerous bylaw
changes over the past several years—not simply the ones proposed
after the Arbitration Panel ruled against the board—suggest the
board's attention, instead, has gone to reinforcing its defenses.
Particularly noteworthy is the 2008 amendment which require that at
least two trustees be members of management or involved in
day-to-day operations—a bylaw which swims upstream against the
pronounced, shareholder-driven trend over the last decade of
enhancing a board's independence from management."
|
|
"If Related/Corvex
are successful in removing the entire CWH Board, their doing so
would leave CWH's business in an indefinite state for an extended
period of time until all shareholders have an opportunity to
nominate new Trustees and a Special Meeting of shareholders can be
convened."i
|
"Those
[considerations] which make for the most dramatic headlines,
however—the risk of regulatory sanction or delisting, dilution from
conversion of preferred shares, or acceleration of the company's
debt—appear to be relatively remote risks…"
|
|
"Related/Corvex are
attempting to seize control of CWH…"i
|
"Ultimately this
market response suggests that investors, far from being worried
about the activists' intentions, saw their arrival as a beacon of
hope."
"As the dissidents
have made a compelling case that change is necessary – and given
the significant risk that leaving any incumbents in place would
enable the current board to be reappointed by those continuing
trustees, preventing shareholders from effecting the necessary
change – shareholders should consent to the removal of the entire
board by voting FOR the proposals on the GOLD dissident
card."
|
Corvex and Related urge shareholders to support the consent
solicitation to start a new chapter for CommonWealth by signing,
dating and returning the GOLD consent card TODAY.
If you have any questions or need assistance voting your shares,
please call today D.F. King &
Co., Inc., our proxy solicitor, at (800) 714-3313. Also visit us at
www.shareholdersforcommonwealth.com.
About Corvex Management LP
Corvex Management LP is an investment firm headquartered in
New York, New York that engages in
value-based investing across the capital structure in situations
with identifiable catalysts. Corvex was founded in March 2011 and follows an opportunistic approach
to investing with a specific focus on equity investments, special
situations and distressed securities largely in North America.
About Related Fund Management LLC
Related Fund Management, LLC is an affiliate of Related
Companies, one of the most prominent privately-owned real estate
firms in the United States. Formed
40 years ago, Related is a fully integrated, highly diversified
industry leader with experience in virtually every aspect of
development, acquisitions, management, finance, marketing and
sales. Related's existing portfolio of real estate assets, valued
at over $15 billion, is made up of
best-in-class mixed-use, residential, retail, office and affordable
properties. For more information about Related Companies please
visit www.related.com.
Additional Information Regarding the
Solicitation
Corvex Management LP and Related Fund Management, LLC have filed
a definitive solicitation statement with the Securities and
Exchange Commission (the "SEC") to (1) solicit consents to
remove the entire board of trustees of CommonWealth REIT (the
"Removal Proposal"), and (2) elect a slate of new trustees at
a special meeting of shareholders that must be promptly called
in the event that the Removal Proposal is successful.
Investors and security holders are urged to read the definitive
solicitation statement and other relevant documents because they
contain important information regarding the solicitation. The
definitive solicitation statement and all other relevant documents
are available, free of charge, on the SEC's website at www.sec.gov.
Information regarding the participants in the solicitation and a
description of their direct and indirect interests, by security
holdings or otherwise, to the extent applicable, is available in
the definitive solicitation statement filed with the SEC on
January 28, 2014 and Supplement No. 1
filed with the SEC on February 13,
2014.
For further information, contact:
Rupal Doshi
Corvex
(212) 474-6750
rdoshi@corvexcap.com
Joanna Rose
Related
(212) 801-3902
jrose@related.com
INVESTORS:
Edward McCarthy / Richard Grubaugh
D.F. King & Co., Inc.
(212) 269-5550
[i] Quotes from February 28, 2014
CommonWealth REIT press release
SOURCE Related Fund Management, LLC