(Bloomberg) -- Activist investor Indaba Capital Management has amassed a stake in office real estate investment trust Equity Commonwealth, according to a letter reviewed by Bloomberg News.
The investor, which has a nearly 3% stake in the trust, is urging the company to abandon a search for acquisitions and focus on liquidating itself, the letter shows. Indaba said that a year-end deadline to decide between a major acquisition and liquidation incentivizes poor decision making.
Indaba also criticized Equity Commonwealth’s performance and the board’s failure to execute any acquisitions over the past decade. It asked the company to set up a shareholder vote on a prospective liquidation as well as any near-term transaction being pursued by the board.
“It would be a corporate governance ‘worst practice’ for EQC to now pursue a risky deal without incorporating direct shareholder input,” Indaba said in the letter.
Equity Commonwealth, based in Chicago, owns office properties in Colorado, Texas and the District of Columbia, according to its website.
Representatives for Equity Commonwealth and Indaba Capital declined to comment.
Shares of Equity Commonwealth have fallen 6% in the past year, giving the company a market value of about $2.1 billion. The shares rose 1.6% to $19.47 at 2:53 p.m. Monday in New York trading.
In March, Land & Buildings Investment Management, led by Jonathan Litt, disclosed a 3% stake in Equity Commonwealth, also pressuring the company to liquidate the REIT and return capital to shareholders.
Indaba, based in San Francisco, is led by former Farallon Capital partner Derek Schrier. It had taken stakes and agitated at On24 Inc. and Tabula Rasa HealthCare Inc. before entering into co-operation agreements with both companies. Tabula was acquired last year in a $551 million deal, Bloomberg-compiled data showed.
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