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Ahead of the Bell: Zell joins REIT proxy fight

Zell joins CommonWealth REIT proxy battle as trustee nominee

The Associated Press

Two prominent CommonWealth REIT shareholders say billionaire Sam Zell has joined their fight to replace the company's board by agreeing to serve as a trustee nominee and then chairman if elected

Corvex Management LP and Related Fund Management LLC said that Zell and another veteran real estate investment trust executive, David Helfand, have joined a slate of independent nominees for the CommonWealth board. Corvex and Related have separately managed investment funds that own about 9.6 percent of CommonWealth's outstanding shares.

CommonWealth is a real estate investment trust, or REIT, that invests in office and industrial buildings. Corvex and Related have been trying to remove the REIT's entire board for the past year. They said in a statement Tuesday that removing the company's trustees "is the only path to effect real change and unlock the substantial value embedded within the company's conflicted structure."

Corvex and Related said Zell and Helfand have agreed to serve as CommonWealth chairman and CEO, respectively, if they are elected. Neither Zell, who chairs four public companies including two REITs, nor Helfand own any CommonWealth stock.

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CommonWealth President and Managing Trustee Adam Portnoy said in a statement that the announcement was "an obvious attempt to divert shareholder attention from Related's abysmal historical track record of operating public real estate companies."

He added that his company's shareholders also should be aware that there is not a trustee election taking place at this time.

CommonWealth shares closed at $26.39 on Tuesday and have climbed 54 percent over the past year.