CommonWealth REIT: Marcato Joins Fight With Corvex and Related Fund Over Consent Solicitation At CommonWealth.


Getting the band back together.

Last we saw Marcato Capital Management, they had teamed up with Corvex Management to reign down some REIT reorg on Corrections Corporation of America (CXW).

Last we saw Corvex Management, they had teamed up with Related Fund Management to drop some consent solicitation and  takeover on CommonWealth REIT (CWH).

As it turns out, Marcato holds about 3.1% of CommonWealth.  Do you wonder how they feel about Corvex’ consent solicitation?  Surprise.  They support it.

Marcato issued a release and sent a letter to CommonWealth’s independent board expressing support for the Corvex/Related Fund consent solicitation.

Marcato stated that it believes:

  • CWH is undervalued due to a misalignment of incentives between CommonWealth and REIT Management & Research, CommonWealth’s business and property manager (“RMR”), and CommonWealth’s shareholders that rewards RMR for capital allocation decisions that destroy shareholder value and have resulted in a disappointing track record of underperformance;
  • the CommonWealth’s board’s lack of independence is concerning; and
  • that changing the external management structure and removing the conflicted board are critical to allow investors to realize the full value of their investment.

Corvex and Marcato succeeded in creating value with Corrections Corporation of America.  We’ll see if it was a fluke or a trend with CommonWealth.

John Belushi and Dan Aykroyd commentary on the Corvex/Related Fund/Marcato fight with CommonWealth REIT.


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