Ex-Icahn Lt. Meister Takes On REIT

Feb 27 2013 | 12:35pm ET

Carl Icahn protégé Keith Meister learned from the master, and he's applying that wisdom to a major real-estate investment trust.

Meister's Corvex Management has sued CommonWealth REIT in an effort to block a planned stock offering, which it says would harm investors. In addition, Corvex and its co-litigant, real-estate firm The Related Cos., have offered to buy CommonWealth for about $2.1 billion.

"For reasons unbeknownst to us, you have yet to respond to any and all of our requests, while simultaneously continuing the marketing efforts for your value-destructive equity offering," Corvex and Related wrote to CommonWealth. "We believe this reaction (or lack thereof) is indefensible and ultimately a dereliction of your fiduciary duties."

CommonWealth, which owns more than 500 office buildings in the U.S., responded that the share sale was in its "best interests."

Corvex and Related own about 9.8% of CommonWealth. They allege that the REIT's stock sale is merely an effort by CommonWealth's management to garner assets, upon which their compensation is based.


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