STAMFORD, Conn.–(Enterprise WIRE)–Now Land & Buildings Investment decision Administration LLC (alongside one another with its affiliates, “Land & Buildings”), a major shareholder of Condominium Investment and Management Business (“AIV” or the “Company”) (NYSE: AIV), declared that is has filed a preliminary solicitation assertion with the Securities and Exchange Commission trying to find to get in touch with a exclusive conference of the Company’s shareholders (the “Special Assembly,” or the “Meeting”) to maintain an advisory vote on AIV’s not long ago introduced separation of its enterprise into two, individual and unique, publicly traded organizations, Apartment Revenue REIT (“AIR”) and Aimco, as a result of a reverse spin-off, which Land & Buildings thinks could demolish shareholder value.
Land & Properties issued the next assertion:
“Because we issued our community letter to the AIV Board on September 22nd, our considerations all around the proposed separation of the Organization into two individual general public entities have only grown extra urgent and acute. Dependent on feed-back we have obtained, we also believe that a considerable the vast majority of our fellow shareholders share these views. Notably, a offer-aspect survey carried out by a leading Wall Avenue analyst discovered that close to 72% of respondents do not feel the proposed reverse spin-off will include worth, and 90% believe that it is a dilemma that should be set to a shareholder vote1. Sadly, alternatively of listening to the voices of its shareholders, sell-side analysts and industry authorities, AIV and its Board have seemingly picked out to double down by relocating ahead with the spin-off without placing it to a shareholder vote.
In a 9:12 pm ET push launch2 on the working day we issued our letter, the Business provided its response titled “Additional Tax Facts Related to 2020 Property Product sales and Spin-Off,” adopted up by an 8-K3 filing on September 25th in the variety of a Q&A ostensibly intended to solution shareholder concerns and allay fears about the transaction.
In our perspective, these transparently reactive disclosures only more disclosed how deficient the Company’s prior 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 each share – or approximately a quarter of the Company’s share price tag – as a end result of the proposed spin-off. These disclosures also clearly show that running unit holders will not pay taxes or have a “step up,” this means that Chairman and CEO Terry Considine and the rest of the management staff will have a materials conflict in thinking about the transaction and going forward, as they will not want to provide property which could travel far more worth for prevalent shareholders simply because of the significant tax they would owe as a consequence of not having a “step up” in foundation at the time of the spin. CEO Considine is also very likely to have a tax avoidance windfall from his practically 700,000 selections which we believe will very likely be reissued put up-spin on a tax advantaged foundation.
Even further, the Board’s and management’s troubling keep track of file results in us to seriously issue no matter whether the proposed transaction was devised with the ideal interests of shareholders in thoughts. Underneath their management, the Enterprise has been a major underperformer relative to its Proxy Condominium Friends4 given that its IPO and has persistently traded at a significant discount to its own NAV estimate as very well as market-aspect estimates of NAV. In our check out, this is not a team that has attained the self-confidence of its shareholders or the mandate to possibility shareholder money in the furtherance of daring bets executed with no regard for buyers.
We proceed to imagine the proposed spin-off will not near the Company’s significant discount to mentioned NAV of $58 for every share based mostly on the investing of Proxy Apartment Friends with identical credit card debt and condominium possession.
As a consequence of the Company’s evident refusal to do the correct thing and choose action on its have to maintain a shareholder vote on this materials transaction, we have submitted a preliminary solicitation assertion initiating the process to connect with a particular assembly to approve a resolution urging the Board to place any proposed separation or spin-off involving the Organization to a vote, and to chorus from proceeding with any this sort of separation or spin-off unless permitted by a the greater part of the Company’s shareholders. We have made distinct from the outset that this resolution would not be binding. However, we consider that the exclusive assembly is significant for offering an chance for shareholders to express their views on this product transaction in advance of it is way too late, specially provided that the spin-off would be completed before the Company’s 2021 Once-a-year Assembly of Shareholders, which is commonly held in late April.
We had hoped the Organization would respect that cases this kind of as this – in which the management and Board of an underperforming corporation decide on to acquire questionable actions in the encounter of important shareholder opposition – rarely stop perfectly. In truth, we hope there is continue to a likelihood they will come to their senses. Barring this advancement, we reserve all rights to get any steps that we deem important to maintain this Board accountable for its steps, and we glimpse forward to reaching out to our fellow shareholders before long.”
Specific Details Concerning THE Participants
Land & Structures Financial investment Management, LLC, alongside one another with the other members named herein (collectively, “Land & Properties”), has built a preliminary filing with the Securities and Exchange Fee (“SEC”) of a solicitation statement and an accompanying ask for card to be used to solicit requests for the calling of a particular conference of shareholders of Apartment Expenditure and Administration Business (the “Corporation”).
LAND & Structures STRONGLY ADVISES ALL SHAREHOLDERS OF THE Business TO Examine THE SOLICITATION Statement AND OTHER PROXY Materials AS THEY Become Out there Mainly because THEY WILL Consist of Vital Facts. These PROXY Elements WILL BE Obtainable AT NO Cost ON THE SEC’S Net Web-site AT HTTP://WWW.SEC.GOV. IN ADDITION, THE Members IN THIS PROXY SOLICITATION WILL Supply COPIES OF THE SOLICITATION Statement Without having Cost, WHEN Available, On Request. REQUESTS FOR COPIES Really should BE DIRECTED TO THE PARTICIPANTS’ PROXY SOLICITOR.
The members in the solicitation are expected to be Land & Buildings Funds Progress Fund, LP, a Delaware restricted partnership (“L&B Capital” ), L & B Real Estate Prospect Fund, LP, a Delaware minimal partnership (“L&B Actual Estate”), Land & Buildings GP LP, a Delaware minimal partnership (“L&B GP”), L&B Possibility Fund, LLC, a Delaware restricted legal responsibility company (“L&B Opportunity”), Land & Structures Financial investment Management, LLC, a Delaware minimal liability enterprise (“L&B Management”), Jonathan Litt and Corey Lorinsky.
As of the date hereof, L&B Funds straight owns 426,106 shares of Course A Prevalent Stock, $.01 par value, of the Organization (the “Common Stock”). As of the date hereof, L&B True Estate instantly owns 484,581 shares of Popular Inventory. As of the day hereof, L&B Opportunity immediately owns 54,912 shares of Frequent Inventory. As of the date hereof, 1,100,875 shares of Frequent Stock had been held in a specified account managed by L&B Administration (the “Managed Account”). L&B GP, as the typical associate of each individual of L&B Funds and L&B Real Estate, may possibly be considered the beneficial proprietor of the (i) 426,106 shares of Popular Stock owned by L&B Capital and (ii) 484,581 shares of Common Inventory owned by L&B Serious Estate. L&B Administration, as the expenditure manager of just about every of L&B Cash, L&B Real Estate and L&B Prospect, and as the investment advisor of the Managed Account, may well be deemed the beneficial proprietor of the (i) 426,106 shares of Widespread Inventory owned by L&B Funds, (ii) 484,581 shares of Frequent Stock owned by L&B Actual 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, could be considered the useful owner of the (i) 426,106 shares of Frequent Inventory owned by L&B Cash, (ii) 484,581 shares of Frequent Stock owned by L&B Actual Estate, (iii) 54,912 shares of Widespread Inventory owned by L&B Possibility, and (iv) 1,100,875 shares of Typical Stock held in the Managed Account. As of the date hereof, Mr. Lorinsky straight owns 10 shares of Typical Stock.
1 Based on Citigroup poll as of 7:30 am ET on September 23rd, 2020.
2Aimco Provides Additional Tax Data Linked to 2020 Home Profits and Spin-Off (9/22/20)
38-K Submitting (9/25/20)
4 Proxy Condominium Friends outlined as AvalonBay Communities, Inc. (AVB), Camden Home Believe in (CPT), Essex Property Rely on (ESS), Fairness Residential (EQR), Mid-The us Apartment Communities, Inc. (MAA), and UDR, Inc. (UDR) as disclosed in the Company’s Proxy Statement filed with the SEC on March 11, 2020.