Corvex Management LP and Related Cos. offered to buy CommonWealth REIT (CWH:US) 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:US), 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.
To contact the reporter on this story: Brian Louis in Chicago at firstname.lastname@example.org
To contact the editor responsible for this story: Kara Wetzel at email@example.com