Corvex Management and Related Fund Management, major shareholders of CommonWealth REIT (NYSE:EQC), have filed a preliminary consent solicitation statement with the SEC to seek the removal of CommonWealth REIT's entire board of trustees, the companies announced today.
Together, Corvex and Related own 9.8% of CommonWealth REIT's outstanding common stock, and they have been critics of CommonWealth's announcement in February of a new stock offering to raise money to pay off debt. The investors were concerned that such an offering would dilute the value of their shares. CommonWealth went ahead with the stock offering anyway.
Corvex and Related said today they wish to replace the current board with one elected soon after in a special shareholder meeting.
"We bellieve that the initiatives launched today present a clear and attractive path for shareholders of CWH to remove the current board of trustees and bring change to CWH," said Keith Meister of Corvex and Jeff T. Blau of Related in the companies' announcement.
CommonWealth countered the Corvex and Related announcement with one of its own, calling on its shareholders "to take no action at this time ... [as] the CWH Board of Trustees will carefully consider and evaluate the Corvex/Related filings and will communicate with CWH's shareholders in due course."