March 13 CommonWealth REIT's top
shareholder said it filed a preliminary consent solicitation
statement with the U.S. Securities and Exchange Commission to
remove the office building operator's entire board of trustees.
Corvex Management LP, along with another shareholder Related
Fund Management LLC, has been seeking changes at CommonWealth
since late February when CommonWealth announced a stock
Corvex, run by Carl Icahn associate Keith Meister, and
Related Fund Management, the investment arm of real estate major
Related Cos, together own about 8.6 percent of CommonWealth.
They offered to buy the REIT for $2.26 billion or more if it
did not go ahead with the stock offering, which they said was
After CommonWealth went ahead with the offering, the
investors sued the company.
CommonWealth in a statement on Wednesday asked its
shareholders to not take any action regarding the consent
solicitation statement, saying Corvex and Related have not
proposed any replacement trustees.
Corvex and Related said in a statement on Wednesday they
have hired Deutsche Bank Securities as their financial adviser
for their investment in CommonWealth.
Deutsche Bank is ready to arrange third-party debt financing
to replace CommonWealth's existing term-loan and revolving
credit agreement, the investors said.
CommonWealth's charter allows shareholders of two-thirds of
the outstanding shares to remove trustees without cause by
written consent. Luxor Capital, which owns about 6 percent of
the REIT, has come out in support of the activist investors.
CommonWealth shares closed at $22.00 on the New York Stock
Exchange on Wednesday.