Corvex Management LP and Related Cos. offered to buy CommonWealth REIT (CWH) for $24.50 a share, or about $2.9 billion, and said they will pursue removing the company’s board if a takeover bid isn’t accepted.
The proposal is a reduction from the group’s February bid of $27 a share and follows a CommonWealth stock offering that the investors objected to, Corvex and Related said today in a statement. Together, they own about 9 percent of the Newton, Massachusetts-based real estate investment trust and are its largest shareholders.
Keith Meister’s Corvex and Related, led by Chief Executive Officer Jeff Blau, said in a letter to the company’s board that the offer may be reduced further if CommonWealth goes ahead with a sale of its 56 percent stake in Select Income REIT (SIR), which it spun off last year in an initial public offering. Select Income and CommonWealth are both managed by Reit Management & Research LLC, or RMR.
“We continue to believe that CWH is significantly undervalued due to its obsolete externally advised management structure and flawed corporate governance,” the New York-based investors said in the letter. “We have unfortunately concluded that you as a board are not prepared to independently undertake or evaluate any such value-enhancing steps.”
Tim Bonang, a CommonWealth spokesman, didn’t immediately return a call seeking comment on the latest offer by the investors.
CommonWealth was little changed at $22.16 at 1:29 p.m. in New York trading.
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