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March 3, 2014
08:04 EDTCWHCommonWealth REIT issues statement regarding Sam Zell
CommonWealth REIT issued a statement regarding comments made by Sam Zell on CNBC’s “Squawk Box” program on February 28. Adam Portnoy, Managing Trustee and President of CWH, made the following statement: “Sam Zell’s inability to recollect the number of public company boards on which he serves should be deeply troubling to investors in those companies. Further, this lapse in Zell’s memory and his existing commitments to other business activities, some of which appear to compete with CWH, underscores our belief that he is ‘over-boarded’ and overcommitted and would be unable to devote the necessary time, if elected, to serve as Chairman of the CWH Board. Notably, when invited by CWH to discuss the Company’s strategy and the Board’s commitment to enhancing governance, Zell refused and indicated he was too ‘busy’ to meet. We believe it is clear that Zell has been induced to serve as front man for Related/Corvex with a lucrative agreement, including $17 million of in-the-money options.” The facts are as follows: (i) the trading volume in CWH common shares for the last three months was approximately 1 million shares per day; (ii) if elected as a CWH trustee, Zell would not avoid any filing requirements by selling his shares in CWH; (iii) Zell sold his shares in CWH, which were purchased about two weeks earlier, for approximately $4.9 million and he realized a profit of almost $400,000; and (iv) Zell purchased his shares in CWH at $23.53 per share and he sold his shares at $25.50 per share, and Zell’s agreement with Related/Corvex provide him the opportunity to purchase over 4 million common shares of CWH at prices of $21.00 and $24.00 per share. Adam Portnoy further commented: “We believe that Zell’s motivations for his trading activity in CWH common shares in the days prior to joining the Related/Corvex campaign to take control of CWH have not been adequately addressed.”
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