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As if the steady ascent of REIT values wasn't enough of a reward for shareholders in
CommonWealth REIT(CWH), owners of the small-cap real estate investment trust got the upside from a hefty buyout offer tacked onto their price performance. That's left CWH owners up more than 43% since the first trading session in January.
CWH's $24.50 cash buyout offer is the work of Corvex Management and property manager Related Cos. There's another Carl Icahn tie-in with this acquisition deal -- Corvex is run by Keith Meister, an alum of Icahn's fund. CommonWealth owns a hefty portfolio of office properties as well as substantial stakes in former government leasing and senior care facilities and the largest industrial landowner in Hawaii.
One potential complication is the fact that CWH intends to unload its 56% stake in
Select Income REIT(SIR), the firm's Hawaiian connection. The potential for a hostile takeover makes the goings-on particularly drama-filled, but that's justified by a 8.26% premium between the offer price and the REIT's current share price. Risky though this deal may be, it's pretty clear that there's considerable value to unlock from the situation.