This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
$1 buys you full access to ALL of TheStreet's Subscription Services! Learn More

Luxor Capital Group Announces Its Disapproval Of CommonWealth REIT Decision To Move Forward With Its Offering

Stocks in this article: CWH

NEW YORK, March 1, 2013 /PRNewswire/ -- Luxor Capital Group, LP, a New York based investment manager ("Luxor"), beneficially owns and controls in excess of 6.7 million common shares of CommonWealth REIT (NYSE: CWH), or approximately 8.0% of the common shares outstanding.  Luxor is releasing the following open letter to the Trustees of CWH:

To the Board of Trustees:

On February 27, 2013, CommonWealth REIT ("CWH" or the "Company") announced that it had priced 30,000,000 shares of Common Stock in a public offering (the "Offering") at $19.00 per share.  On February 28, 2013, the Issuer announced the underwriters had exercised the overallotment option on 4,500,000 shares, and on March 1, 2013, the Issuer announced that it had increased its maximum tender offer amount with respect to outstanding debt to $650,000,000.  In response to these decisions by you, we are actively exploring litigation to recoup the value destroyed by the Offering and are willing to use any and all appropriate legal means to prevent further destruction of shareholder value.

We find it unconscionable that the Board of Trustees would vote to issue shares significantly below-market in light of the offer on the table from a credible buyer at a significant premium.  We agree with CNBC's assessment of the transaction, which they described as "a real-life poison pill" and their mocking assessment of your decision to pursue the Offering in light of the bid- "amazing- amazing that they did this".[1]

We demand the following steps be immediately taken by the Board of Trustees:

  1. Form an Independent Committee with Independent Counsel and an Independent Financial Advisor to immediately pursue strategic alternatives;
  2. Cease all asset acquisition and disposition activity until the conclusion of the independent strategic review;
  3. Cease all equity offerings in CWH or indirectly through its majority owned subsidiary, Select Income REIT; 
  4. Do not seek to amend, in any way more favorable to REIT Management and Research LLC ("RMR"), the existing management agreement between CWH and RMR; and
  5. Authorize, if you have not already done so, the Independent Trustees to retain their own independent counsel.  Given the internal conflicts of interest we currently perceive at the Board level, we believe that CWH counsel cannot adequately represent the Independent Trustees and therefore that the Independent Trustees cannot adequately represent shareholders.

Luxor Capital Group, LP

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,810.06 +91.06 0.51%
S&P 500 2,063.50 +10.75 0.52%
NASDAQ 4,712.97 +11.1030 0.24%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs