Investors seek to oust entire CommonWealth board

Investment firms say they've got shareholder support to oust CommonWealth REIT board

Associated Press

NEW YORK (AP) -- Investors who have expressed interest in buying CommonWealth REIT say they've got support from holders of more than 70 percent of the company's shares to remove the entire board of directors.

Corvex Management LP and Related Fund Management LLC, which together own nearly 10 percent of the shares, said Friday that the current directors are "no longer trustees and have no authority" to direct the Newton, Mass.-based real estate investment trust. They called for a special shareholder meeting and vowed to run a slate of candidates.

Corvex and Related Fund Management have previously said that CommonWealth's stock is undervalued.

CommonWealth spokesman Timothy Bonang called the funds' statement "yet another attempt to mislead and confuse CommonWealth shareholders." He said the investors' actions aren't a valid offer because the dispute is in arbitration.

In March, the company issued 34.5 million new shares over the objections of the two funds. The company planned to use the $628 million in proceeds to retire debt.

The company, which operates in more than 40 states, is shedding suburban office and industrial properties to focus on owning and managing downtown office buildings, often buying them from distressed sellers.

CommonWealth shares rose 98 cents, or 4.5 percent, to close at $22.88.

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