Thinks Shareholders Should have to Have Their Voices Listened to on AIV’s Proposed Spin-Off that Could Wipe out Major Price
Proceeds to Imagine the Proposed Transaction Will Not Close the Company’s Sizeable Price cut to Stated NAV of $58 For each Share and that All Alternatives for Maximizing Price Need to Be Regarded as
Company’s Modern Tries to Justify System for Company Separation Have Only Further more Revealed Extent to Which Transaction Would Reward Administration at the Price of Shareholders
AIV Claims that Spin-Off is in Finest Passions of Shareholders – Yet Refuses to Set the Dilemma to a Shareholder Vote
Now Land & Buildings Financial investment Administration LLC (with each other with its affiliates, “Land & Structures”), a significant shareholder of Apartment Investment decision and Administration Firm (“AIV” or the “Company”) (NYSE: AIV), introduced that is has filed a preliminary solicitation assertion with the Securities and Trade Fee seeking to phone a distinctive assembly of the Company’s shareholders (the “Particular Meeting,” or the “Conference”) to maintain an advisory vote on AIV’s lately declared separation of its company into two, different and distinct, publicly traded providers, Apartment Profits REIT (“AIR”) and Aimco, by way of a reverse spin-off, which Land & Properties thinks could wipe out shareholder value.
Land & Properties issued the subsequent statement:
“Since we issued our public letter to the AIV Board on September 22nd, our considerations all around the proposed separation of the Firm into two separate general public entities have only grown more urgent and acute. Based mostly on feed-back we have obtained, we also consider that a considerable vast majority of our fellow shareholders share these views. Notably, a provide-facet survey carried out by a top Wall Avenue analyst uncovered that roughly 72% of respondents do not feel the proposed reverse spin-off will increase value, and 90% believe that it is a dilemma that ought to be put to a shareholder vote1. Sadly, alternatively of listening to the voices of its shareholders, offer-aspect analysts and industry gurus, AIV and its Board have seemingly decided on to double down by transferring forward with the spin-off without having putting it to a shareholder vote.
In a 9:12 pm ET push release2 on the working day we issued our letter, the Corporation provided its response titled “Extra Tax Details Related to 2020 Residence Revenue and Spin-Off,” adopted up by an 8-K3 filing on September 25th in the type of a Q&A ostensibly intended to answer shareholder thoughts and allay problems all around the transaction.
In our view, these transparently reactive disclosures only even further exposed how deficient the Company’s past shareholder communications had been, and the extent to which the spin-off could harm shareholders. Concerningly, the elements laid bare that shareholders will incur a tax of as significantly as $8.00 per share – or virtually a quarter of the Company’s share selling price – as a consequence of the proposed spin-off. These disclosures also clearly show that working unit holders will not fork out taxes or have a “move up,” meaning that Chairman and CEO Terry Considine and the relaxation of the management group will have a content conflict in contemplating the transaction and moving forward, as they will not want to sell assets which could travel extra price for popular shareholders since of the substantial tax they would owe as a consequence of not obtaining a “stage up” in basis at the time of the spin. CEO Considine is also most likely to have a tax avoidance windfall from his almost 700,000 options which we consider will possible be reissued publish-spin on a tax advantaged foundation.
Even further, the Board’s and management’s troubling keep track of file will cause us to critically question irrespective of whether the proposed transaction was devised with the best interests of shareholders in intellect. Beneath their leadership, the Business has been a significant underperformer relative to its Proxy Condominium Peers4 considering that its IPO and has persistently traded at a significant price reduction to its have NAV estimate as perfectly as promote-aspect estimates of NAV. In our see, this is not a team that has acquired the confidence of its shareholders or the mandate to danger shareholder funds in the furtherance of bold bets executed without the need of regard for traders.
We continue to believe the proposed spin-off will not close the Company’s considerable price cut to said NAV of $58 for each share based on the investing of Proxy Condominium Peers with comparable personal debt and condominium ownership.
As a end result of the Company’s apparent refusal to do the appropriate detail and acquire motion on its very own to hold a shareholder vote on this substance transaction, we have filed a preliminary solicitation statement initiating the process to contact a special assembly to approve a resolution urging the Board to set any proposed separation or spin-off involving the Firm to a vote, and to refrain from proceeding with any such separation or spin-off except accepted by a the greater part of the Company’s shareholders. We have designed very clear from the outset that this resolution would not be binding. Having said that, we consider that the distinctive assembly is important for supplying an chance for shareholders to specific their sights on this materials transaction ahead of it is also late, specially offered that the spin-off would be finished just before the Company’s 2021 Annual Assembly of Shareholders, which is usually held in late April.
We had hoped the Organization would take pleasure in that circumstances this kind of as this – where by the management and Board of an underperforming enterprise choose to consider questionable actions in the confront of substantial shareholder opposition – rarely conclusion well. Certainly, we hope there is however a chance they will come to their senses. Barring this development, we reserve all legal rights to just take any actions that we deem vital to maintain this Board accountable for its actions, and we seem forward to achieving out to our fellow shareholders before long.”
Certain Facts Concerning THE Individuals
Land & Properties Financial investment Management, LLC, jointly with the other contributors named herein (collectively, “Land & Structures”), has manufactured a preliminary submitting with the Securities and Exchange Commission (“SEC”) of a solicitation assertion and an accompanying request card to be applied to solicit requests for the contacting of a unique conference of shareholders of Condominium Investment and Management Organization (the “Company”).
LAND & Buildings STRONGLY ADVISES ALL SHAREHOLDERS OF THE Corporation TO Read through THE SOLICITATION Assertion AND OTHER PROXY Elements AS THEY Develop into Readily available Mainly because THEY WILL Have Essential Information and facts. This kind of PROXY Supplies WILL BE Obtainable AT NO Cost ON THE SEC’S World-wide-web Site AT HTTP://WWW.SEC.GOV. IN ADDITION, THE Individuals IN THIS PROXY SOLICITATION WILL Give COPIES OF THE SOLICITATION Statement Devoid of Cost, WHEN Readily available, On Request. REQUESTS FOR COPIES Really should BE DIRECTED TO THE PARTICIPANTS’ PROXY SOLICITOR.
The members in the solicitation are anticipated to be Land & Buildings Money Advancement Fund, LP, a Delaware restricted partnership (“L&B Capital” ), L & B True Estate Chance Fund, LP, a Delaware minimal partnership (“L&B Serious Estate”), Land & Buildings GP LP, a Delaware constrained partnership (“L&B GP”), L&B Opportunity Fund, LLC, a Delaware constrained liability organization (“L&B Prospect”), Land & Properties Investment Administration, LLC, a Delaware limited liability organization (“L&B Administration”), Jonathan Litt and Corey Lorinsky.
As of the day hereof, L&B Cash directly owns 426,106 shares of Class A Widespread Inventory, $.01 par price, of the Firm (the “Popular Inventory”). As of the date hereof, L&B Genuine Estate immediately owns 484,581 shares of Frequent Stock. As of the date hereof, L&B Chance right owns 54,912 shares of Widespread Inventory. As of the date hereof, 1,100,875 shares of Widespread Inventory have been held in a specific account managed by L&B Administration (the “Managed Account”). L&B GP, as the normal partner of just about every of L&B Capital and L&B Genuine Estate, might be considered the effective owner of the (i) 426,106 shares of Common Inventory owned by L&B Cash and (ii) 484,581 shares of Popular Inventory owned by L&B Authentic Estate. L&B Management, as the financial investment manager of each and every of L&B Capital, L&B Real Estate and L&B Prospect, and as the expense advisor of the Managed Account, may possibly be deemed the beneficial operator of the (i) 426,106 shares of Prevalent Stock owned by L&B Capital, (ii) 484,581 shares of Widespread Inventory owned by L&B True Estate, (iii) 54,912 shares of Popular Stock owned by L&B Opportunity, and (iv) 1,100,875 shares of Frequent Stock held in the Managed Account. Mr. Litt, as the managing principal of L&B Administration, may possibly be deemed the helpful operator of the (i) 426,106 shares of Common Inventory owned by L&B Capital, (ii) 484,581 shares of Typical Stock owned by L&B Serious Estate, (iii) 54,912 shares of Popular Stock owned by L&B Chance, and (iv) 1,100,875 shares of Typical Stock held in the Managed Account. As of the day hereof, Mr. Lorinsky specifically owns 10 shares of Popular Stock.
1 Based mostly on Citigroup poll as of 7:30 am ET on September 23rd, 2020.
38-K Filing (9/25/20)
4 Proxy Apartment Peers described as AvalonBay Communities, Inc. (AVB), Camden Assets Have faith in (CPT), Essex Assets Have faith in (ESS), Fairness Residential (EQR), Mid-The us Condominium Communities, Inc. (MAA), and UDR, Inc. (UDR) as disclosed in the Company’s Proxy Assertion filed with the SEC on March 11, 2020.
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