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February 4, 2014
07:19 EDTCWHCommonWealth REIT responds to recent actions by Related/Corve
CommonWealth REIT responded to recent actions by Related Fund Management, LLC and Corvex Management LP’s in their effort to take control of CWH. "Within the last week, Related/Corvex have published their business plan for CWH. In summary, the Related/Corvex business plan appears to be to operate CWH like a real estate opportunity fund, including: (1) selling CWH’s best performing, stabilized assets, (2) increasing leverage, (3) investing in CWH’s most challenged assets, and (4) buying back CWH common shares. This business plan will not produce consistent and growing cash flow. Rather, it will put at risk CWH’s common share dividend and CWH’s investment grade debt ratings, and it is not a business plan which creates shareholder value for a publicly owned REIT. The Related/Corvex business plan for CWH is also not credible because of The Related Companies’ abysmal track record of operating publicly owned real estate companies. When The Related Companies have controlled publicly owned real estate companies in the past, The Related Companies have done well, but public shareholders have not. For example, when the principals of The Related Companies controlled American Mortgage Acceptance Company, or AMAC, and Centerline Holding Company, it ended very badly for shareholders with a bankruptcy and de-listing from the New York Stock Exchange, respectively. Recently, Related/Corvex also publicly identified their handpicked slate of five individuals to serve as trustees for CWH. Contrary to their claim that these nominees are “truly independent”, a majority of these nominees have historical and continuing strong ties to Related/Corvex, including being paid consultants to and investors in The Related Companies or its affiliates. CWH believes that the close ties of these nominees to Related/Corvex and the recent attempt to disenfranchise other shareholders clearly reveal Related/Corvex’s continued efforts to take control of CWH for their own benefit."
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