CommonWealth REIT Comments on Newly Discovered and Previously Undisclosed Sam Zell Conflict of Interest
13 Março 2014 - 9:00AM
Business Wire
CommonWealth REIT (NYSE: CWH) today issued the following
statement regarding Sam Zell’s newly discovered and previously
undisclosed conflict of interest in connection with his
participation in the consent solicitation to remove the entire CWH
Board, without cause, which is being conducted by Related Fund
Management, LLC and Corvex Management LP (together
“Related/Corvex”).
During a television interview on Monday, March 10, 2014, Jeff
Blau, CEO of the Related Companies, disclosed for the first time
that Sam Zell was motivated to join the Related/Corvex hostile
takeover effort because of a dispute concerning property in Hawaii.
Upon investigation, CWH discovered that Zell is the lead investor
in a large tenant of Select Income REIT (NYSE: SIR), a publicly
traded company that owns property in Hawaii and is 44% owned by
CWH. CWH believes the dispute to which Blau apparently made
reference is that Zell has proposed to lower the rent paid by his
company despite the fact that market rents are increasing.
Adam Portnoy, President and Managing Trustee of CWH, made the
following statement after learning of Zell’s newly discovered and
previously undisclosed conflict of interest:
“We did not know until Jeff Blau’s disclosure
during a television interview earlier this week that Zell had any
current dealings with CWH or SIR. We now know that Zell is the lead
investor in a company, Par Petroleum Corporation (OTCQB
Marketplace: PARR), which recently acquired one of the largest
tenants of SIR, a subsidiary of CWH.
“Some of the rent paid by Zell’s company is
scheduled to be reset to fair market value effective April 1; if
the parties cannot agree, the rent will be set by arbitration. We
are concerned that Zell is joining the Related/Corvex hostile
takeover effort so he may influence these lease negotiations to the
benefit of his company and the detriment of SIR shareholders,
including CWH. In this circumstance, Zell’s interests are not
aligned with CWH shareholders. It is particularly disturbing that
Related/Corvex represented Zell was truly independent and neither
Zell nor the Related/Corvex group disclosed Zell’s obvious conflict
of interest when they announced that Zell intends to be a candidate
for chairman of CWH on the Related/Corvex handpicked slate of
trustee nominees.
“The more we learn about the circumstances
that prompted Zell to join the Related/Corvex hostile takeover
effort, the more obvious it becomes that the current consent
solicitation is not about good corporate governance or shareholder
value. Rather, it appears to have been motivated by the short term
private interests of Related/Corvex and their recent partner
Zell.”
The CWH Board of Trustees urges shareholders to Sign, Date and
Mail the WHITE consent
revocation cards which CWH has mailed to shareholders.
CommonWealth REIT is a real estate investment trust
headquartered in Newton, Massachusetts which primarily owns office
buildings located in central business districts across the
country.
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 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).
CommonWealth REITMedia Contacts:Joele Frank Wilkinson Brimmer
KatcherAndrew Siegel/Gabrielle Miller, 212-355-4449orInvestor
Contacts:CommonWealth REITTimothy Bonang, 617-796-8222Vice
President, Investor RelationsorJason Fredette,
617-796-8222Director, Investor Relationswww.cwhreit.com
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