Edgar Filing: CommonWealth REIT

DFAN14A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

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¨		Definitive Proxy Statement

¨		Definitive Additional Materials

x		Soliciting Material Pursuant to §240.14a-12

COMMONWEALTH REIT

(Name of the Registrant as Specified In Its Charter)

CORVEX MANAGEMENT LP

KEITH MEISTER

RELATED FUND MANAGEMENT, LLC

RELATED REAL ESTATE RECOVERY FUND GP-A, LLC

RELATED REAL ESTATE RECOVERY FUND GP, L.P.

RELATED REAL ESTATE RECOVERY FUND, L.P.

RRERF ACQUISITION, LLC

JEFF T. BLAU

RICHARD O’TOOLE

DAVID R. JOHNSON

JAMES CORL

EDWARD GLICKMAN

PETER LINNEMAN

JIM LOZIER

KENNETH SHEA

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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This filing contains (1) a press release issued by Corvex Management LP and Related Fund Management, LLC on January 16, 2014 and (2) updated slides of the presentation filed by Corvex Management LP and Related Fund Management, LLC on December 18, 2013.

**************************************************************

CORVEX AND RELATED ANNOUNCE BOARD SLATE TO BE NOMINATED AT

SPECIAL MEETING OF COMMONWEALTH REIT SHAREHOLDERS

NEW YORK, January 16, 2014 – Corvex Management LP (“Corvex”) and Related Fund Management, LLC (“Related”), whose separately managed investment funds collectively own approximately 9.6% of the outstanding shares of CommonWealth REIT (NYSE:CWH), today announced that they intend to nominate a slate of five highly qualified trustees for consideration by CommonWealth shareholders: James Corl, Edward Glickman, Peter Linneman, Jim Lozier, and Kenneth Shea.

As previously announced, Corvex and Related have commenced the process to launch a new consent solicitation to remove the entire Board of Trustees of CommonWealth in accordance with the rules implemented by the Arbitration Panel ruling on November 18, 2013. To that end, Corvex and Related will file today revised preliminary consent solicitation materials with the Securities and Exchange Commission. Corvex and Related will request a record date for the new solicitation by February 16, 2014.

Keith Meister of Corvex and Jeff T. Blau of Related, said:

“After consulting with fellow shareholders, we are excited to propose a strong slate of nominees with significant, relevant real estate industry expertise, who we are confident have the track records and corporate leadership experience to create significant, long-term value for CommonWealth and all of its shareholders. Our slate of truly independent, accountable trustees will enable us to achieve our sole goal from the beginning — ceasing the value destruction caused by the Portnoys and enabling CommonWealth shareholders to take back their company. The holders of more than 70% of the outstanding shares previously supported our proposal to remove the entire CommonWealth Board of Trustees and we expect the same level of support for our consent solicitation.

“Recently, CommonWealth has conveniently unveiled various reversible, ‘check the box’ governance alterations that in our view do not give shareholders the ability to hold RMR accountable for its underperformance and enable the Portnoys to retain control of CommonWealth, despite their owning virtually no stock. Further, we firmly believe that the two recently-appointed Trustees will be no more ‘independent’ than the other Trustees, having been hand-picked by the same Board who supported every appalling action taken by the Portnoys over the past year to impede the will of CommonWealth’s shareholders. Among others, these actions include passing illegal bylaw amendments, which were rejected by the Arbitration Panel, and reinstating Trustee Joe Morea after only 14% of the outstanding shares were voted for him at the 2013 annual meeting, and then selecting him to spearhead CommonWealth’s efforts to improve governance. As long as the Portnoys maintain control of CommonWealth via their conflicted management structure, CommonWealth will continue its long-term track record of underperformance and value destruction.”

Additional Information on the Nominees

James Corl. James Corl has been a Managing Director at Siguler Guff & Company since 2009, and is the Head of Real Estate. Mr. Corl oversees the Firm’s real estate investment activities, setting investment strategy, designing and constructing the portfolio, identifying potential investments, and negotiating investment terms and conditions. Prior to joining Siguler Guff, Mr. Corl spent 13 years in the REIT investment industry, most recently as Chief Investment Officer for all of the real estate activities of Cohen & Steers, Inc., a leading investor in global real estate securities. While at Cohen & Steers, Inc. Mr. Corl was directly responsible for over $30 billion of client assets invested in mutual funds and institutional separate accounts around the world. As an Associate with the Real Estate Investment Banking group at Credit Suisse First Boston, Mr. Corl was involved in acquiring portfolios of non-performing loans and distressed real estate assets for CSFB’s Praedium Real Estate Recovery Fund, as well as restructuring troubled real estate companies as publicly traded REITs.

Edward Glickman. Edward Glickman is the Executive Director of the Center for Real Estate Finance Research and Clinical Professor of Finance at New York University Stern School of Business, and has been a Professor at the Stern School of Business since 2006. Mr. Glickman is also currently the Executive Chairman of FG Asset Management US, an alternative asset manager serving Korean investors, and is a Senior Advisor for Econsult Solutions, Inc., an econometric consulting firm. From 2004 to 2012 Mr. Glickman served as President and Chief Operating Officer of the Pennsylvania Real Estate Investment Trust, where he oversaw all operating functions and was a member of its Board of Trustees. Mr. Glickman has more than 30 years of experience in the real estate and financial services industry having been previously employed by The Rubin Organization, Presidential Realty Corporation, Shearson Lehman Brothers and Smith Barney. Mr. Glickman is a Fellow of the Royal Institute of Chartered Surveyors, a Certified Treasury Professional and a Registered Securities Principal.

Peter Linneman. From 1979 to 2011, Dr. Linneman was a Professor of Real Estate, Finance and Public Policy at the University of Pennsylvania, Wharton School of Business and is currently an Emeritus Albert Sussman Professor of Real Estate there. Dr. Linneman is currently a principal of Linneman Associates, a real estate advisory firm, and a principal of American Land Funds, a private real estate acquisition fund. For more than 35 years he has advised leading corporations and served on over 20 public and private boards, including serving as Chairman of Rockefeller Center Properties, where he led the successful restructuring and sale of Rockefeller Center in the mid-1990s. Dr. Linneman has won accolades from around the world, including PREA’s prestigious Graaskamp Award for Real Estate Research, Wharton’s Zell-Lurie Real Estate Center’s Lifetime Achievement Award, Realty Stock Magazine’s Special Achievement Award, and has been named “One of the 25 Most Influential People in Real Estate” by Realtor Magazine and was included in The New York Observer’s “100 Most Powerful People in New York Real Estate.”

Jim Lozier. Jim Lozier served as co-founder and CEO of Archon Group L.P. from its formation in 1996 until 2012. Archon, a wholly owned subsidiary of Goldman Sachs, is a diversified international real estate services and advisory company that under Mr. Lozier’s leadership managed 36,000 assets with a gross value of approximately $59 billion and over 8,500 employees in offices located in Washington D.C., Los Angeles, Dallas, Boston, Asia and Europe. Prior to the formation of Archon, Mr. Lozier was an employee of the J.E. Robert Company and was responsible for managing the Goldman Sachs/J.E. Robert joint venture for two years. Mr. Lozier directed the acquisition efforts of the joint venture between GS and JER from 1991-1995.

Jim has served on the Board of Directors of Dallas CASA (Court Appointed Special Advocates for Children) since 1999, and currently is on the Executive Committee and is heading CASA’s capital campaign.

Kenneth Shea. Kenneth Shea is the President of Coastal Capital Management LLC, an affiliate of Coastal Development, LLC, a New York-based privately-held developer of resort destinations, luxury hotels and casino gaming facilities. Prior to joining Coastal in September 2009, from July 2008 to August 2009, Mr. Shea was a Managing Director for Icahn Capital LP, where Mr. Shea had responsibility for principal investments in the gaming and leisure industries. From 1996 to 2008, Mr. Shea was employed by Bear, Stearns & Co., Inc., where he was a Senior Managing Director and global head of the Gaming and Leisure investment banking department. At Bear, Stearns, Mr. Shea played an active role on over $55 billion of M&A and capital raising transactions for many of the leading public companies in the gaming and leisure sector including Harrah’s Entertainment, Inc., Station Casinos Inc., Penn National Gaming Inc., Las Vegas Sands Corp., Wynn Resorts Ltd., and Carnival Corp. Mr. Shea currently serves on the board of directors of CVR Refining, LP.

Additional Information Regarding the Solicitation

Corvex Management LP and Related Fund Management, LLC have filed a preliminary solicitation statement with the Securities and Exchange Commission (the “SEC”) to (1) solicit consents to remove the entire board of trustees of CommonWealth REIT (the “Removal Proposal”), and (2) elect five new trustees at a special meeting of shareholders that must be promptly called in the event that the Removal Proposal is successful. Investors and security holders are urged to read the preliminary solicitation statement in its entirety, and the definitive solicitation statement and other relevant documents when they become available, because they will contain important information regarding the solicitation. The preliminary and definitive solicitation statement and all other relevant documents will be available, free of charge, on the SEC’s website at www.sec.gov.

The following persons are participants in connection with the solicitation of CommonWealth REIT shareholders: Corvex Management LP, Keith Meister, Related Fund Management, LLC, Related Real Estate Recovery Fund GP-A, LLC, Related Real Estate Recovery Fund GP, L.P., Related Real Estate Recovery Fund, L.P., RRERF Acquisition, LLC, Jeff T. Blau, Richard O’Toole, David R. Johnson, James Corl, Edward Glickman, Peter Linneman, Jim Lozier and Kenneth Shea. Information regarding the participants in the solicitation and a description of their direct and indirect interests, by security holdings or otherwise, to the extent applicable, is available in the preliminary solicitation statement to be filed today with the SEC.

About Corvex Management LP

Corvex Management LP is an investment firm headquartered in New York, New York that engages in value-based investing across the capital structure in situations with identifiable catalysts. Corvex was founded in March 2011 and follows an opportunistic approach to investing with a specific focus on equity investments, special situations and distressed securities largely in North America.

About Related Fund Management LLC

Related Fund Management, LLC is an affiliate of Related Companies, one of the most prominent privately-owned real estate firms in the United States. Formed 40 years ago, Related is a fully integrated, highly diversified industry leader with experience in virtually every aspect of development, acquisitions, management, finance, marketing and sales. Related’s existing portfolio of real estate assets, valued at over $15 billion, is made up of best-in-class mixed-use, residential, retail, office and affordable properties. For more information about Related Companies please visit www.related.com.

For further information, contact:

Rupal Doshi

Corvex

(212) 474-6750

rdoshi@corvexcap.com

Joanna Rose

(212) 801-3902

jrose@related.com

INVESTORS:

Edward McCarthy / Richard Grubaugh

D.F. King & Co., Inc.

(212) 269-5550

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Additional Information Regarding the Solicitation

Update on Recent Events

The Arbitration Panel Has Spoken

November

18,

2013,

the

Arbitration

Panel

(“Panel”)

issued

award

that

struck

down

the

illegal bylaws

that

stripped

shareholders

their

right

vote

through

consent solicitation

were

further

vindicated

when

the

Panel

also

ordered

clearly

defined

set

procedures

for

new

consent

solicitation

and:

After

two

weeks

live

testimony

and

reviewing

hundreds

exhibits,

believe

the

Panel

plainly

agreed

with

our

view

that

the

Portnoys

are

highly

incentivized

and

capable

continuing

their

campaign

shareholder

disenfranchisement

Prohibited

any

action

intended

impede

frustrate

the

new

solicitation,

and

Declared

would

remain

available

resolve

any

issues

disputes

the

new

consent

solicitation

Arbitration Panel, November 18, 2013

“There is no question that CWH’s Bylaws…erect a complex wall of procedural

hurdles to any consent solicitation.”

Update on Recent Events

The Trustees’

Actions Speak Louder Than Words

The Trustees’

misconduct over the past year is startling:

Approved a massively dilutive equity offering,

Passed unprecedented, illegal bylaw amendments,

Lobbied to amend Maryland law under the cover of darkness, and

Wasted over $30 million of shareholder money on year-long litigation process

In our view, the Trustees accomplished nothing

–

But

their

actions

say

about

their

true

intentions

than

their

promises

ever

can

and

the

Company

are

the

same

position

would

begin

with

had

the

Portnoys

simply

allowed

for

the

shareholder

vote

that

was

granted

shareholders

the

Company’s

Declaration

Trust

years

ago

The

Panel

recognized

that

shareholders

have

the

right

vote

consent

solicitation

remove

Trustees

without

cause

“at

any

time”

The

Panel

has

implemented

clearly

defined

set

procedures

hold

new

consent solicitation

These

actions

were

taken

prevent

shareholders

from

simply

holding

vote,

but

what

did

they

accomplish?

Shareholders are finally poised to take back CommonWealth and decide its

future

The Portnoys’

Corporate Governance Proposals

Why It’s All Smoke and Mirrors

Reality

Our Proposal

Annual Elections

•

Requires

total

four

annual

meetings

with

full

de-staggering

not

taking

place

until

May

2017

•

Remaining

Trustees

are

still

empowered

reinstate

trustee,

such

Joseph

Morea,

who

was

not

re-elected

but

reinstated

earlier

this

year

•

Bylaws

still

require

two

Managing

Trustees

employees

RMR

•

Current

Managing

Trustees

are

our

opinion

responsible

for

the

poor

state

CWH

•

MUTA

allows

CWH

unilaterally

re-

stagger

its

board

any

time

•

The

Portnoys

refuse

answer

whether

they

will

insist

impossible

procedural

requirements

nominate

Trustees,

including

twice-rejected

3%/3-year

rule

•

Does

not

clarify

when

they

deem

current

disputes

resolved

whether

future

disputes

with

other

shareholders

will

also

delay

implementation

their

proposals

Portnoys’

Proposal

Annual

election

Trustees

will

begin

2015

following

shareholder

vote

the

2014

Annual

Meeting

and

resolution

the

pending

disputes

with

Corvex/Related

Annual

Elections

the

(2014)

Annual

Meeting

Corvex/Related’s Strategic Plan

Disruptive Transition of Authority –

“Plan B”

the

event

the

Trustees

are

not

cooperative

transitioning

authority,

and

Corvex,

clearly

incentivized

minimize

disruption

one

CWH’s

largest

shareholders,

have

plan

protect

the

Company

Shareholders

should

not

coerced

into

voting

for

the

current

board

out

fear

that

the

existing

Trustees

will

“burn

down

the

house”

the

way

out

the

door

Jim

Lozier,

30+

year

industry

veteran,

can

retained

lead

the

company

interim basis*

Mr.

Lozier

served

co-founder

and

CEO

the

Archon

Group

L.P.,

subsidiary

Goldman

Sachs, from

its

formation

1996

until

2012

During

Mr.

Lozier’s

tenure

Archon,

the

company

grew

from

320

employees

8,500

employees

managing

36,000

assets

with

gross

value

approximately

$59

billion

CBRE,

one

the

world’s

largest

integrated

real

estate

services

firms,

has

agreed

provide

interim

property

management

services**

Successfully

managed

transition

leasing

management

services

for

1.2

billion

square

feet

commercial

properties

the

U.S.

over

the

nine

years,

including

transitions

done

under

significant

time

pressure

and

Corvex

have

agreed

purchase

51%

the

bank

debt

order

prevent

acceleration

the

Company’s

debt

* Mr. Lozier is providing consulting services to Related in connection with Related’s investment in CommonWealth and has agreed to

serve in the role of interim CEO of the Company on such terms as may be reasonably agreed to by Mr. Lozier and CWH.

** CBRE will perform management and leasing services on customary terms to be agreed to in the event CommonWealth’s

management agreement with RMR is terminated.