Activist Blackwells sues GNL, Necessity Retail over board dispute

Global Net Lease

19/12/2022 14:30

By Anirban Sen
       NEW YORK, Dec 19 (Reuters) - Blackwells Capital, a hedge
fund seeking to replace some of the board directors at Global
Net Lease Inc  GNL.N  and Necessity Retail REIT Inc  RTL.O ,
told Reuters on Monday it has filed a lawsuit against the real
estate companies after being blocked from putting its own board
nominees forward.
    Blackwells wants both companies to replace AR Global, the
external manager of their properties, over what it argues are
high costs and poor performance. It wants to nominate two
directors at each company to ratchet up the pressure on them.
    The lawsuit filed on Monday in Maryland state court accuses
the real estate investment trusts (REITs) of using recently
amended bylaws to block Blackwells' nominees and reserve the
board seats for AR Global.
    "By relying on a guileful interpretation of recent bylaw
amendments, and by fabricating other pretexts to reject our
valid nomination notices, these Boards seem to be acting only as
marionettes to help AR Global," Blackwells founder Jason Aintabi
said in a statement.
    The companies did not immediately respond to requests for
comment.
    Blackwells is not the only activist investor that has
contested bylaw changes at companies this year. Politan Capital
recently sued healthcare company Masimo Corp.  MASI.O  over
bylaw amendments that the activist claimed were used as a
pretext to block board nominations. 
    Blackwells is seeking to improve corporate governance at the
two REITs, end the relationships with AR Global, and spur a
review of strategic alternatives, Reuters reported in October.
    GNL has a market capitalization of about $1.4 billion, while
Necessity Retail REIT is valued at roughly $821 million. Over
the last five years, GNL and Necessity Retail REIT have lost
roughly half of their value.
 (Reporting by Anirban Sen in New York; Editing by Stephen
Coates)
 ((Anirban.Sen@thomsonreuters.com; Twitter: @asenjourno; Reuters
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