NEW YORK (The Deal) -- A pair of activist funds have brought in additional firepower for their fight against CommonWealth REIT (CWH), adding billionaire real estate veteran Sam Zell to its list of candidates to CommonWealth's board.
Newton, Mass.-based CommonWealth has been sparring with Corvex Management and Related Fund Management, a pair of hedge funds that together own 9.6% of the company's shares and which are attempting to replace five CommonWealth directors.
The funds late Tuesday said Zell and David Helfand, another veteran REIT executive, were joining their slate, and hinted the pair could be willing to serve as chairman and as CEO, respectively, in the event the funds prevail in their fight and oust current CommonWealth management.
Zell in a statement said "we see an attractive opportunity at CommonWealth uniquely suited to our expertise," promising to be responsive to shareholders if voted onto the board.
"One of our core operating principals is the alignment of interests between company leadership and shareholders," Zell said. "We believe the shareholders of our REITs have clearly benefited from having an accountable, properly aligned board overseeing an effective, internalized management team with the sole goal of increasing shareholder value."
Neither Zell nor Helfand own any CommonWealth stock, but the funds said they have granted an entity associated with the two nominees an option to acquire about 4 million shares.
CommonWealth president and managing trustee Adam Portnoy in a statement called the announcement "an obvious attempt to divert shareholder attention from Related's abysmal historical track record of operating public real estate companies."