NEW YORK, March 28, 2013 /PRNewswire/ -- Corvex Management LP and Related Fund Management, LLC, whose separately managed investment funds collectively own approximately 9.0% of the outstanding common shares of CommonWealth REIT, released the following letter delivered today to the Board of Trustees of CWH:
Board of Trustees CommonWealth REIT Two Newton Place 255 Washington Street Newton, MA 02458-1634
March 28, 2013
Dear Members of the Board of Trustees:We appreciate the time taken by Messrs. Barry and Adam Portnoy to meet with us in Boston this past Tuesday (after our initial request on February 25, 2013). We hereby submit to the Board of Trustees a proposal to acquire up to 100% of the outstanding shares of CWH. We are prepared to offer the same economic terms reflected in our February 27, 2013 letter to you, as represented by a $7.3 billion enterprise value. Our current offer represents a price of $24.50 per share today, as compared to $27.00 per share on February 27, 2013, due to the mathematical impact of the highly dilutive equity offering you completed earlier this month. 1 Our current offer represents a premium of approximately 55% to CWH's price per share on February 25, 2013, the day before we publicly announced our ownership stake in CWH. Our offer is subject to further downward adjustment if you move forward with a sale of all or a portion of CWH's controlling stake in Select Income REIT. We continue to believe that CWH is significantly undervalued due to its obsolete externally advised management structure and flawed corporate governance. We firmly believe that taking the proper steps, including but not limited to termination of the management agreement with RMR, adoption of corporate governance best practices, cessation of related party transactions, and shareholder friendly capital allocation, will create significant value for all CWH shareholders. However, in light of your recent actions, we have unfortunately concluded that you as a Board are not prepared to independently undertake or evaluate any such value enhancing steps.
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