Corvex Group Boosts Stake in CommonWealth Property TrustBrian Louis
Corvex Management LP and Related Cos. bought about 1.9 million shares in CommonWealth REIT after unsuccessfully challenging a stock offering by the real estate investment trust last week.
Keith Meister’s Corvex and Related, led by Chief Executive Officer Jeff Blau, now own 10.1 million shares, or 8.5 percent of the Newton, Massachusetts-based REIT, according to a filing with the U.S. Securities and Exchange Commission today.
Corvex and Related projected that CommonWealth’s real estate assets are worth about $40 a share, according to a Feb. 26 letter to the board. The “misalignment of incentives” between the REIT and its external management has driven down the value of the stock, the New York-based investors said. They sought to stop the stock sale because of the dilution to shareholders it would cause.
CommonWealth last week sold 34.5 million shares at $19 each, resulting in net proceeds of about $628 million, the REIT said in a statement. Before the sale, Corvex and Related owned 9.8 percent of the outstanding shares.
Corvex and Related had offered to acquire the company for $27 a share before the stock was priced and said they may seek to replace the five-member board with independent trustees.
Joanna Rose, a spokeswoman for the investors, declined to comment on the share purchase. Tim Bonang, a CommonWealth spokesman, didn’t immediately return a call and e-mail seeking comment.
CommonWealth was little changed at $22.15 at the close today in New York.