CommonWealth REIT Comments on Recent Downgrade Warning by Moody’s
10 Março 2014 - 9:30AM
Business Wire
Moody’s Review Underscores Potential Value
Destruction by Related/Corvex Consent Solicitation
CommonWealth REIT (NYSE:CWH) today noted that on March 7, 2014,
Moody’s Investors Service announced that it was placing CWH’s
investment grade ratings “on review for downgrade,” which would
affect approximately $2 billion of CWH securities. In a press
release regarding CWH, Moody’s stated:
“Moody’s Investors Service placed
the ratings of CommonWealth REIT on review for downgrade reflecting
the potential for significant shifts in financial and strategic
policies as a result of the activist shareholders’ efforts to
displace the current Board of Directors and management…..If the
activist shareholders are successful, Moody’s will focus on
potential for increased leverage, secured debt and/or core asset
sales, as well as execution risk associated with transitioning the
operations of a large, nationally diverse real estate portfolio to
a new management team and infrastructure.”
CWH believes Moody’s action confirms that there are significant
risks for CWH shareholders if Related Fund Management, LLC and
Corvex Management LP (“Related/Corvex”) are successful in removing
the entire CWH Board without cause. It appears that
Related/Corvex’s plan for CWH is to sell CWH’s best performing
assets, increase leverage and buyback stock.
Adam Portnoy, President and Managing Trustee of CWH, made the
following statement regarding Moody’s announcement:
“The CWH Board is disappointed, but not
surprised, by Moody’s decision to place CWH on review for downgrade
because of Related/Corvex’s short term scheme for CWH. Moody’s
announcement validates our long held belief that the Related/Corvex
plan for CWH is nothing more than a financial engineering scheme
designed to increase CWH’s share price in the short term at the
expense of long term shareholder value. In addition to clearly
putting CWH’s investment grade debt ratings at risk, the scheme
proposed by Related/Corvex will also likely put CWH’s dividends at
risk.
“We also believe that Related/Corvex’s effort
to remove the entire Board by written consent, and without cause,
creates serious and unnecessary risks to CWH’s business. The far
better and less disruptive course is for shareholders to
participate in the CWH annual shareholders’ meeting on June 13,
2014. The fact that Related/Corvex are willing to proceed in this
reckless manner demonstrates that their goal is to seize immediate
control of CWH at any cost, and has little or nothing to do with
corporate governance or the best interests of all other
shareholders.”
CommonWealth REIT is a real estate investment trust that
primarily owns office properties located throughout the United
States. CWH is headquartered in Newton, MA.
WARNING REGARDING
FORWARD LOOKING STATEMENTS
THIS PRESS RELEASE INCLUDES FORWARD LOOKING STATEMENTS WITHIN
THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
AND OTHER SECURITIES LAWS. THESE FORWARD LOOKING STATEMENTS ARE
BASED UPON CWH'S PRESENT BELIEFS AND EXPECTATIONS, BUT THEY ARE NOT
GUARANTEED TO OCCUR AND MAY NOT OCCUR FOR VARIOUS REASONS,
INCLUDING SOME REASONS BEYOND CWH’S CONTROL.
ADDITIONAL INFORMATION
REGARDING THE CONSENT SOLICITATION
CWH, its Trustees and certain of its executive officers, and
Reit Management & Research LLC and certain of its directors,
officers and employees may be deemed to be participants in the
solicitation of consent revocations from shareholders in connection
with the solicitation being conducted by Related/Corvex. On January
29, 2014, CWH filed a definitive consent revocation statement with
the SEC in response to the Related/Corvex solicitation and has
mailed the definitive consent revocation statement and form of
WHITE consent revocation card to each shareholder entitled to
deliver a written revocation in connection with the consent
solicitation. SHAREHOLDERS ARE URGED TO READ THE DEFINITIVE CONSENT
REVOCATION STATEMENT FILED WITH THE SEC, AND ANY AMENDMENTS OR
SUPPLEMENTS THERETO AND ANY OTHER RELEVANT DOCUMENTS THAT CWH MAY
FILE WITH THE SEC WHEN THEY BECOME AVAILABLE, BECAUSE THEY CONTAIN
IMPORTANT INFORMATION. Additional information regarding the
identity of the potential participants and their direct or indirect
interests, by share holdings or otherwise, is set forth in the
definitive consent revocation statement filed by CWH with the SEC
in connection with the solicitation of revocations of consents.
Shareholders may obtain free of charge copies of the definitive
consent revocation statement and any other documents filed by CWH
with the SEC in connection with the Related/Corvex solicitation at
the SEC’s website (http://sec.gov), at CWH’s website
(http://cwhreit.com) or by requesting these materials from Timothy
Bonang, by phone at (617) 796-8222, or by mail at Two Newton Place,
255 Washington Street, Newton, MA 02458 or by requesting materials
from the firm assisting CWH in the solicitation of consent
revocations, Morrow & Co., LLC, toll free at (800) 276-3011
(banks and brokers call collect at (203) 658-9400).
A Maryland Real Estate Investment Trust with
transferable shares of beneficial interest listed on the New York
Stock Exchange.No shareholder, Trustee or officer is personally
liable for any act or obligation of the Trust.
Media:Joele Frank Wilkinson Brimmer KatcherAndrew
Siegel/Jonathan Keehner212-355-4449orInvestor:CommonWealth
REITTimothy Bonang, 617-796-8222Vice President, Investor
RelationsorJason Fredette, 617-796-8222Director, Investor
Relationswww.cwhreit.com
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