Hedge fund Corvex Management has claimed victory in its proxy battle with CommonWealth REIT.
Corvex and Related Cos. said yesterday that their bid to remove the real estate investment trust’s entire board won 81% of the shareholder vote. A two-thirds majority is needed to oust a sitting board.
Corvex has blasted CommonWealth’s founding family, the Portnoys, who continue to control the company. The hedge fund alleges that the family has a conflict of interest through the ownership of an external management fund, and has done an all-around lousy job running CommonWealth.
“The shareholders have exercised their rights and we look forward to working with the trustees in the coming days to arrange for an orderly transition process that best protects the interests of all shareholders,” Corvex’s Keith Meister and Related’s Jeff Blau said. “We will immediately reach out to the trustees to begin these discussions.”
The vote is the second time Corvex has declared victory against CommonWealth; last year, their proxy win was invalidated on technical grounds. CommonWealth has until March 25 to try to repeat the feat, through an inspection.
Corvex and Related have proposed their own slate of board candidates, and plan to install private-equity billionaire Sam Zell as chairman of CommonWealth.