Hedge fund Corvex Management has added some controversial firepower to its bid to unseat the board of CommonWealth REIT.
Corvex and its partners, Related Fund Management, have been joined by private-equity billionaire Sam Zell. Zell and the co-president of his Equity Group Investments, David Helfand, have joined Corvex's board slate, and will likely serve as chairman and CEO, respectively, of the company should the proxy succeed.
The move comes just a week after Zell came to the defense of Kleiner Perkins Caufield & Byers co-founder Thomas Perkins, who compared progressive policies to the infamous Nazi pogrom against Jewish-owned business and synagogues in 1938, Kristallnacht. Zell told Bloomberg TV that his feeling is that Perkins is "right" and that the so-called 1% "work harder."
The controversy hasn't dulled Corvex founder Keith Meister's enthusiasm.
"We are thrilled to be joined by Sam Zell, whose chairmanship of other REITs has unquestionably maximized value for shareholders," Meister and Related's Jeff Blau said.
Equity Group does not yet own any CommonWealth shares, but will have an option to buy up to 4 million if the proxy fight succeeds.
Corvex and Related are widely expected to win the ouster of the CommonWealth board. Their slate won last year, but was invalidated on technical grounds.
"We are fully supportive of Corvex and Related's efforts to maximize value at CommonWealth for all shareholders," Zell said. "We see an attractive opportunity at CommonWealth uniquely suited to our expertise in leading public real-estate companies and in turning around underperforming assets."