What We're Reading ~ Hedge Fund Links 5/3/13

Seth Klarman cautions "false sense of calm in the US" [ValueWalk]

Emerging manager interview with Tappan Street Partners [Distressed Debt Investing]

Children's Investment Fund trumpets Japan Tobacco investment [Moneybeat]

Paul Singer on gold's irreplaceability and euro's dark future [ValueWalk]

Corvex's Keith Meister lays out investment in Commonwealth [Moneybeat]

Valiant Capital has rough first quarter [Institutional Investor's Alpha]

JANA's Rosenstein slams Agrium [Absolute Return]

SEC said to push for lifting ban on hedge fund ads [Bloomberg]

Hedge funds scooping up personal property tax liens [Term Sheet]

Highfields Capital faces uphill task with Tim Hortons [Hedgeworld]

Eddie Lampert tries to convince shareholders Sears is on the right track [Hedgeworld]

Lansdowne exits Prudential short after meaningful losses [Bloomberg]

You've never heard of one of the best performing hedge funds [Quartz]

Tough times for hedge funds that bet on market tumult [Reuters]

Hedge funds drive demand for Greek Corporate Debt [Moneybeat]

Indian hedge funds dare where foreign investors fear [Reuters]

The hunt for Steve Cohen [Vanity Fair]

Keith Meister's Corvex Capital Starts New Position in CommonWealth REIT, Proposes Takeover

Keith Meister's hedge fund firm Corvex Management recently filed a 13D with the SEC on shares of CommonWealth REIT (CWH) in conjunction with The Related Companies.  Per the filing, the funds have revealed a 9.8% ownership stake in CWH with 8,175,001 shares.

Corvex/Related vs. CommonWealth

Corvex outlined its desire to meet with management to address the various opportunities that exist for value creation.  They also were appalled that the company hasn't canceled its previously announced underwritten public offering of up to 31,050,000 shares.

Corvex thinks it's "preposterous" that the company would do such a thing with shares trading at such a large discount to intrinsic value (they believe it's approximately $40 per share).  If the company doesn't announce intent to cancel, Corvex said it's prepared to file litigation.

The funds' 13D filing with the SEC also includes a proposal to take the company over for $25 per share, a 58% premium at the time), but management hasn't responded.  As such, Corvex and Related pursued the following:

- Sent additional letters to the board
- Filed a complaint for injunctive and declaratory relief and rescission alleging that CWH breached its fiduciary duty to shareholders

The company said today that they're still going forward with the planned stock offering and has refused to meet with Corvex and Related.  So, it will be interesting to see how this one plays out.  You can read all the various letters Corvex/Related have sent here.  


Corvex & Related's Presentation on CWH

Also embedded below is the presentation on CWH that Corvex & Related attached to their SEC filing:



Per Google Finance, CommonWealth REIT is "a real estate investment trust (REIT). CWH’s primary business is the ownership and operation of real estate, including office and industrial buildings and leased industrial land."

This isn't the only activist investment from Meister as we've also detailed Corvex's activist presentation on ADT (ADT).