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Tuesday, February 26, 2013

Investors ready to bid $2.1 billion or more for CommonWealth REIT, (NYSE: CWH)

CommonWealth REIT shares surged more than 50 percent after activist investor Keith Meister and real estate major Related Cos said they were willing to purchase the owner of office buildings for $2.1 billion or more.Corvex Management, run by Carl Icahn associate Meister, and Related Fund Management, the investment arm of Related Cos, together reported a near 10 percent stake in CommonWealth earlier on Tuesday and called for the company to cancel its proposed share and debt offering."We believe that the company's real estate assets are significantly undervalued due to the misalignment of incentives between the company and its externally advised management structure, and track record of underperformance," the investors wrote in a letter to the CommonWealth board.The shareholders said the stock has the potential to cross $50 per share over two years if CommonWealth made changes to its management structure and operating performance and followed a more shareholder-friendly capital allocation policy.

CommonWealth REIT (CWH) is a real estate investment trust (REIT). Shares of CWH traded higher by 53.94% or $8.55/share to $24.40. In the past year, the shares have traded as low as $13.46 and as high as $19.48. On average, 684027 shares of CWH exchange hands on a given day and today's volume is recorded at 34317008.