Reuters: Regulatory News: CommonWealth rejects Related and Corvex offer, moves to protect board

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CommonWealth rejects Related and Corvex offer, moves to protect board Apr 15th 2013, 14:51 Mon Apr 15, 2013 11:33am EDT April 15 (Reuters) - Office building operator CommonWealth REIT rejected a conditional buyout offer by Related Fund Management LLC and Corvex Management LP and adopted measures that make it more difficult to remove its board members. Corvex, run by former Carl Icahn associate Keith Meister, along with Related, has been seeking changes at CommonWealth since late February when it announced a public offering of its stock. Together, the two own about 9 percent of CommonWealth. CommonWealth said the buyout offer "appeared to be part of a plan by Corvex/Related to seize control of CWH for their own benefit". The REIT said it has adopted provisions of the Maryland Unsolicited Takeovers Act, under which its board of trustees cannot be removed without cause. () The activist investors oppose the structure under which CommonWealth's management is compensated based on the assets under management, instead of profitability. The two shareholders had filed a preliminary consent solicitation statement with the U.S. Securities and Exchange Commission a month back to replace CommonWealth's board of trustees. Commonwealth said it believes the investors' filing with the SEC is invalid and will have no effect. Related and Corvex proposed to buy CommonWealth in February, subject to the company cancelling its share offering that they said was "value destroying." The REIT, however, went ahead with the public offering at $19 per share, raising $627.6 million. The two funds later lowered their offer price for CommonWealth to $24.50 per share from $27. BofA Merrill Lynch is the financial adviser to CommonWealth, while Skadden Arps Slate Meagher & Flom and Saul Ewing are its legal counsel. CommonWealth's shares were trading flat at $22.90 on the New York Stock Exchange. Link this Share this Digg this Email Reprints

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