CommonWealth shares fall after offering closes
CommonWealth REIT's shares fell Tuesday after the real estate investment trust completed a stock offering, despite the objections of two major shareholders.
THE SPARK: CommonWealth REIT completed an offering of 34.5 million shares of the company Tuesday. The company plans to use the proceeds of roughly $627.6 million to buy back debt.
THE BIG PICTURE: CommonWealth, based in Newton, Mass., is a real estate investment trust with holdings across the U.S.
The company is trying to buy back senior notes but has been fighting objections from shareholders Corvex Management LP and Related Fund Management LLC, which own a combined stake of almost 10 percent in the company.
The two shareholders have filed two separate lawsuits against CommonWealth seeking to block the sale and alleging CommonWealth trustees were attempting to mislead and defraud shareholders. A federal judge in Massachusetts on Monday denied their request to keep the sale from closing.
Corvex Management and Related Fund Management have previously said that the company's stock is undervalued and expressed a willingness to buy the rest of the company at a premium to its market value at the time.
SHARE ACTION: CommonWealth shares fell 70 cents, or 2.9 percent, to $23.20 in afternoon trading in relatively high volume. The stock remains near the upper end of its 52-week trading range of $13.46 to $25.25.