STAMFORD, Conn.–(Business enterprise WIRE)–These days Land & Buildings Expenditure Administration LLC (collectively with its affiliates, “Land & Buildings”), a important shareholder of Apartment Financial investment and Management Corporation (“AIV” or the “Company”) (NYSE: AIV), announced that is has submitted a preliminary solicitation assertion with the Securities and Exchange Fee looking for to call a exclusive conference of the Company’s shareholders (the “Special Meeting,” or the “Meeting”) to maintain an advisory vote on AIV’s recently announced separation of its small business into two, separate and distinctive, publicly traded organizations, Condominium Income REIT (“AIR”) and Aimco, by way of a reverse spin-off, which Land & Buildings believes could ruin shareholder value.
Land & Structures issued the subsequent assertion:
“Due to the fact we issued our public letter to the AIV Board on September 22nd, our issues all-around the proposed separation of the Company into two separate public entities have only developed more urgent and acute. Primarily based on responses we have been given, we also imagine that a significant the greater part of our fellow shareholders share these sights. Notably, a provide-aspect survey performed by a major Wall Street analyst unveiled that somewhere around 72% of respondents do not believe that the proposed reverse spin-off will insert benefit, and 90% consider it is a concern that need to be put to a shareholder vote1. However, as a substitute of listening to the voices of its shareholders, offer-aspect analysts and field gurus, AIV and its Board have seemingly decided on to double down by going ahead with the spin-off without having placing it to a shareholder vote.
In a 9:12 pm ET push launch2 on the working day we issued our letter, the Enterprise supplied its reaction titled “Extra Tax Information and facts Relevant to 2020 Home Product sales and Spin-Off,” adopted up by an 8-K3 filing on September 25th in the form of a Q&A ostensibly meant to response shareholder inquiries and allay worries around the transaction.
In our check out, these transparently reactive disclosures only even more exposed how deficient the Company’s previous shareholder communications experienced been, and the extent to which the spin-off could damage shareholders. Concerningly, the materials laid bare that shareholders will incur a tax of as considerably as $8.00 for every share – or nearly a quarter of the Company’s share value – as a end result of the proposed spin-off. These disclosures also exhibit that working device holders will not fork out taxes or have a “step up,” meaning that Chairman and CEO Terry Considine and the rest of the administration workforce will have a content conflict in thinking about the transaction and transferring ahead, as they will not want to sell assets which could generate more benefit for widespread shareholders mainly because of the substantial tax they would owe as a end result of not having a “step up” in foundation at the time of the spin. CEO Considine is also probably to have a tax avoidance windfall from his practically 700,000 options which we believe that will likely be reissued publish-spin on a tax advantaged foundation.
Even further, the Board’s and management’s troubling monitor history will cause us to significantly question no matter whether the proposed transaction was devised with the most effective interests of shareholders in brain. Less than their management, the Enterprise has been a considerable underperformer relative to its Proxy Apartment Peers4 due to the fact its IPO and has persistently traded at a considerable discounted to its very own NAV estimate as well as sell-side estimates of NAV. In our check out, this is not a crew that has earned the confidence of its shareholders or the mandate to risk shareholder money in the furtherance of bold bets executed without having regard for buyers.
We continue on to imagine the proposed spin-off will not close the Company’s considerable discount to said NAV of $58 for every share centered on the trading of Proxy Apartment Friends with very similar credit card debt and condominium ownership.
As a result of the Company’s clear refusal to do the correct detail and choose motion on its have to maintain a shareholder vote on this content transaction, we have submitted a preliminary solicitation statement initiating the system to phone a specific meeting to approve a resolution urging the Board to place any proposed separation or spin-off involving the Firm to a vote, and to chorus from proceeding with any these kinds of separation or spin-off unless authorized by a the vast majority of the Company’s shareholders. We have produced distinct from the outset that this resolution would not be binding. Nonetheless, we feel that the exclusive conference is essential for offering an option for shareholders to convey their views on this content transaction before it is also late, especially supplied that the spin-off would be done before the Company’s 2021 Once-a-year Meeting of Shareholders, which is commonly held in late April.
We had hoped the Business would take pleasure in that cases these kinds of as this – where by the administration and Board of an underperforming organization decide on to acquire questionable actions in the facial area of sizeable shareholder opposition – hardly ever stop very well. Indeed, we hope there is nevertheless a prospect they will come to their senses. Barring this advancement, we reserve all rights to just take any steps that we deem important to maintain this Board accountable for its steps, and we glance ahead to reaching out to our fellow shareholders soon.”
Sure Info About THE Members
Land & Buildings Expenditure Administration, LLC, with each other with the other members named herein (collectively, “Land & Buildings”), has manufactured a preliminary submitting with the Securities and Trade Fee (“SEC”) of a solicitation statement and an accompanying request card to be used to solicit requests for the contacting of a specific meeting of shareholders of Condominium Investment decision and Management Firm (the “Organization”).
LAND & Properties STRONGLY ADVISES ALL SHAREHOLDERS OF THE Company TO Study THE SOLICITATION Statement AND OTHER PROXY Resources AS THEY Turn into Offered Due to the fact THEY WILL Comprise Important Info. These PROXY Components WILL BE Readily available AT NO Demand ON THE SEC’S Internet Site AT HTTP://WWW.SEC.GOV. IN ADDITION, THE Participants IN THIS PROXY SOLICITATION WILL Deliver COPIES OF THE SOLICITATION Assertion Without the need of Cost, WHEN Obtainable, On Ask for. REQUESTS FOR COPIES Should really BE DIRECTED TO THE PARTICIPANTS’ PROXY SOLICITOR.
The individuals in the solicitation are expected to be Land & Structures Money Progress Fund, LP, a Delaware minimal partnership (“L&B Capital” ), L & B Authentic Estate Option Fund, LP, a Delaware confined partnership (“L&B Real Estate”), Land & Structures GP LP, a Delaware limited partnership (“L&B GP”), L&B Opportunity Fund, LLC, a Delaware minimal legal responsibility business (“L&B Opportunity”), Land & Properties Expenditure Management, LLC, a Delaware constrained legal responsibility corporation (“L&B Management”), Jonathan Litt and Corey Lorinsky.
As of the day hereof, L&B Cash straight owns 426,106 shares of Course A Typical Inventory, $.01 par value, of the Enterprise (the “Common Stock”). As of the day hereof, L&B True Estate immediately owns 484,581 shares of Common Stock. As of the date hereof, L&B Possibility instantly owns 54,912 shares of Widespread Stock. As of the day hereof, 1,100,875 shares of Prevalent Inventory have been held in a certain account managed by L&B Administration (the “Managed Account”). L&B GP, as the standard spouse of each of L&B Capital and L&B Real Estate, might be deemed the beneficial operator of the (i) 426,106 shares of Common Inventory owned by L&B Capital and (ii) 484,581 shares of Popular Stock owned by L&B Real Estate. L&B Management, as the investment decision supervisor of each individual of L&B Cash, L&B Serious Estate and L&B Possibility, and as the expense advisor of the Managed Account, may possibly be considered the useful proprietor of the (i) 426,106 shares of Widespread Inventory owned by L&B Funds, (ii) 484,581 shares of Popular Stock owned by L&B Serious Estate, (iii) 54,912 shares of Common Stock owned by L&B Chance, and (iv) 1,100,875 shares of Popular Inventory held in the Managed Account. Mr. Litt, as the controlling principal of L&B Administration, may possibly be considered the beneficial proprietor of the (i) 426,106 shares of Widespread Inventory owned by L&B Capital, (ii) 484,581 shares of Widespread Stock owned by L&B Serious Estate, (iii) 54,912 shares of Prevalent Stock owned by L&B Prospect, and (iv) 1,100,875 shares of Common Inventory held in the Managed Account. As of the date hereof, Mr. Lorinsky immediately owns 10 shares of Popular Inventory.
1 Dependent on Citigroup poll as of 7:30 am ET on September 23rd, 2020.
2 Aimco Delivers More Tax Information and facts Associated to 2020 Home Income and Spin-Off (9/22/20)
3 8-K Filing (9/25/20)
4 Proxy Condominium Peers defined as AvalonBay Communities, Inc. (AVB), Camden House Believe in (CPT), Essex Property Believe in (ESS), Fairness Household (EQR), Mid-America Condominium Communities, Inc. (MAA), and UDR, Inc. (UDR) as disclosed in the Company’s Proxy Statement filed with the SEC on March 11, 2020.