Bloomberg News

Orange Calls for Meeting to Remove Manager of Charter Hall

June 17, 2011

(Adds Charter Hall share price in fifth paragraph.)

June 17 (Bloomberg) -- Orange Capital LLC called for a shareholder meeting to vote on replacing the manager of Australia’s Charter Hall Office REIT.

The hedge fund, which owns 19 percent of the Sydney-based trust along with Luxor Capital Group LP and Point Lobos Capital LLC, plans to hold the meeting on or about July 27, Orange said in an emailed statement. Fortius Funds Management Pty Ltd. and Moss Capital Funds Management Ltd. have agreed to manage the trust, continue U.S. asset sales, seek bids for its Australian assets, and review whether any of its approximately $200 million should be returned to unitholders, the statement said.

“Moss Capital and Fortius are well positioned to manage Charter Hall’s assets,” said the statement, which was issued by Orange Capital Managing Partner Daniel Lewis.

Orange last month requested a copy of Charter Hall Office’s unitholder registry to plan the vote, saying the manager had rejected its call for measures to narrow the gap between the value of the trust’s assets and its unit price.

Charter Hall Office shares have gained 22 percent since Jan. 12, the day before New York-based Orange disclosed its stake and said it had hired advisers to evaluate options for the company. The REIT rose 1.1 percent to A$3.64 a share as of 1:53 p.m. in Sydney. Charter Hall Group shares fell 5.1 percent to A$2.06, the biggest drop since December.

Apollo, Broadway

Charter Hall is proceeding with the sale of its $1.68 billion of U.S. assets, after backing away from an initial plan for a joint venture that would have allowed the manager to keep a 50 percent stake in the properties and manage them for a fee. Shortlisted bidders are in due diligence, independent Chairman Roger Davis said in a letter to shareholders.

Apollo Global Management LLC and Broadway Partners are among companies that have offered to buy the U.S. buildings for more than the value Charter Hall placed on them last year, three people familiar with the bid said last month. Area Property Partners, Boston Properties Inc. and Highwoods Properties Inc. also made separate offers for some or all of the 14 U.S. properties, which include office buildings in Los Angeles and Denver, the people said.

--With assistance from Jacob Greber in Sydney. Editors: Kara Wetzel, Malcolm Scott.

To contact the reporter on this story: Jonathan Keehner in New York at jkeehner@bloomberg.net; Nichola Saminather in Sydney on nsaminather1@bloomberg.net

To contact the editor responsible for this story: David Scheer at dscheer@bloomberg.net; Andreea Papuc at apapuc1@bloomberg.net


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