NEW YORK, Feb. 27, 2015 /PRNewswire/ -- Clinton Group,
Inc. ("Clinton" or "CGI"), a stockholder of Campus Crest
Communities, Inc. ("Campus Crest", "CCG" or the "Company")
(NYSE:CCG), and Campus Evolution Villages, LLC ("Campus Evolution
Villages" or "CEV" and together with CGI, the "Clinton/Campus
Evolution Group"), a leading private owner and operator of student
housing assets, sent an open letter to the stockholders of Campus
Crest.
"We believe that our plan addresses both the immediate needs of
the Company and long-term shareholder value. As members of
the management team, we will work diligently to implement an
immediate and positive impact on policies, procedures and day to
day operations that in our view will put the Company on the path to
maximizing stockholder value while at the same time providing
potential buyers the attractive alternative of an in-place team
which should yield broader interest and pricing strength from the
sale process," stated Andrew Stark,
CEO of Campus Evolution Villages.
"The Clinton/Campus Evolution Group plan is more aligned with
shareholder value creation than what we see as a 'hope proposal'
that the incumbent board has instituted, which, in our view, could
very likely leave the Company without a suitor and relegated to an
executive team lacking management experience in the industry and an
entrenched board as assets 'waste' for another year," added
Evan Denner, Chief Investment
Officer of Campus Evolution Villages.
A copy of the letter is included in the release.
About Clinton Group, Inc.
Clinton Group, Inc. is a diversified asset management firm that
is a Registered Investment Advisor. The firm has been investing in
global markets since its inception in 1991 with expertise that
spans a wide range of investment styles and asset classes.
About Campus Evolution Villages, LLC
Campus Evolution Villages is a singularly focused student
housing management company; a thought leader and change agent
setting a new standard in student living that goes beyond merely
heads in beds. Its senior management team has more than 25 years of
experience in serving the student demographic. Campus Evolution
Villages' specialized focus and customer-centric approach gives it
a unique perspective on the particular needs and challenges of
managing student housing. Campus Evolution Villages owns and/or
manages approximately 10,000 beds today at 20 universities from
San Diego, California to
Clemson, South Carolina.
CEV and its principals have a proven track-record in student
housing, commercial and residential real estate finance and
development, and in growing successful operating real estate
platforms, which gives it a unique insight into the nuances of
student housing. The principals of CEV are seasoned leaders with
turn-around and growth experience at both the corporate and asset
level and also with significant exposure to the capital markets,
including public company and shareholder know-how. CEV has
wide-ranging student housing management experience and strong
relationships with owners, universities and other institutions.
Top-down leadership and brand building, with culture immersion and
training, has separated CEV from its peers; CEV understands that
student housing is a management-intensive operating business
requiring a cohesive team at all touch-points focused on the
experiential nature of student housing.
CLINTON RELATIONAL OPPORTUNITY MASTER FUND, L.P., CLINTON
RELATIONAL OPPORTUNITY, LLC, CLINTON GROUP, INC. AND GEORGE E. HALL (COLLECTIVELY, "CLINTON"),
SCOTT R. ARNOLD, RANDALL H. BROWN, WILLIAM A. FINELLI AND RAYMOND
MIKULICH (THE "NOMINEES") AND CAMPUS EVOLUTION VILLAGES, LLC, EVAN
DENNER AND ANDREW STARK (TOGETHER WITH CLINTON AND THE NOMINEES,
THE "PARTICIPANTS") INTEND TO FILE WITH THE SECURITIES AND EXCHANGE
COMMISSION (THE "SEC") A DEFINITIVE PROXY STATEMENT AND
ACCOMPANYING FORM OF PROXY CARD TO BE USED IN CONNECTION WITH THE
PARTICIPANTS' SOLICITATION OF PROXIES FROM THE STOCKHOLDERS OF
CAMPUS CREST COMMUNITIES, INC. (THE "COMPANY") FOR USE AT THE
COMPANY'S 2015 ANNUAL MEETING OF STOCKHOLDERS (THE "PROXY
SOLICITATION"). ALL STOCKHOLDERS OF THE COMPANY ARE ADVISED TO READ
THE DEFINITIVE PROXY STATEMENT AND OTHER DOCUMENTS RELATED TO THE
PROXY SOLICITATION, WHEN THEY BECOME AVAILABLE, BECAUSE THEY WILL
CONTAIN IMPORTANT INFORMATION, INCLUDING ADDITIONAL INFORMATION
RELATED TO THE PARTICIPANTS. WHEN COMPLETED, THE DEFINITIVE PROXY
STATEMENT AND AN ACCOMPANYING PROXY CARD WILL BE FURNISHED TO SOME
OR ALL OF THE COMPANY'S STOCKHOLDERS AND WILL BE, ALONG WITH OTHER
RELEVANT DOCUMENTS, AVAILABLE AT NO CHARGE ON THE SEC'S WEBSITE AT
HTTP://WWW.SEC.GOV/.
INFORMATION ABOUT THE PARTICIPANTS AND A DESCRIPTION OF THEIR
DIRECT OR INDIRECT INTERESTS BY SECURITY HOLDINGS IS CONTAINED IN
THE PRELIMINARY PROXY STATEMENT ON SCHEDULE 14A FILED BY CLINTON
WITH THE SEC ON FEBRUARY 23, 2015.
THIS DOCUMENT CAN BE OBTAINED FREE OF CHARGE FROM THE SOURCE
INDICATED ABOVE.
February 27, 2015
To Our Fellow Stockholders of Campus Crest:
Clinton Group is an investor alongside you in Campus Crest
Communities, Inc. ("Campus Crest" or the "Company") and we have
partnered with Campus Evolution Villages, LLC ("Campus Evolution")
(together, "we" or our "Group") in our quest to improve the
Company. To be clear, Clinton Group has no ownership interest
or other monetary interest in Campus Evolution or its
properties. My firm is gratified that Campus Evolution has
decided to work with us for the benefit of all the stockholders of
the Company.
We recognize that there is tremendous fatigue among the
shareholder base with the Company's management team, both the past
and the patchwork present, and the underperformance of this Company
despite such an attractive macroeconomic backdrop for student
housing. As such, I promise that our communications now and
in future will be brief and to the point. What will not be
brief is our upcoming white paper on the current critical situation
at the Company. As we continue to dig, we are uncovering what
we view as more troubling findings on capital allocation, lavish
spending and interconnected relationships of the board of directors
of the Company (the "Board"). We will spell out, in great
detail, the business plan going forward.
The Company's 2014 results speak for themselves, and the recent
earnings call this past Thursday was particularly frustrating to
us, as it was our intention to participate in the conference call
but instead the Company's fear of being challenged apparently
overcame them, as we were relegated to listen-only mode. On
the other hand, to give you a sense of Campus Evolution's progress
in 2014, blended NOI growth across same store properties was
10.7%. Campus Evolution is also bullish on 2015,
evidenced by its pre-leasing rates that are approximately 10
percentage points ahead of last year on a same store basis.
On the subject of leadership, it is unclear to us today if
Richard Kahlbaugh is still the
Interim CEO of this Company and if he still occupies the post, what
obligation could have been more important than participating on the
earnings call? The resignation of Angel Herrera, former Chief Operating Officer,
on February 20th has left
Aaron Halfacre as the sole named
executive officer overseeing day to day management. Mr.
Halfacre even acknowledged on the earnings call that the Company's
boasted 125 years of student housing expertise did not reside in
the executive suite. This lack of experience alone is troublesome,
but is further aggravated by the fact that the Board has no student
housing experience and limited real estate and REIT experience
outside their service on the Company's Board.
Our nominees are committed to continuing the strategic
alternatives process upon their watch and without prejudice.
Our Group would welcome a market clearing bid for the Company which
would relieve stockholders of the immediate pain, although
certainly leave money on the table. Installing our Board and
management team today can only assist in the outcome of the
strategic alternatives process. An immediate impact to
property level operations and management controls would certainly
yield a more robust plan, and installing a cohesive management team
would only improve the outcome as the lens of a private equity
buyer or strategic buyer looking to add a student housing vertical
would come in focus. We believe that, absent our management team,
the situation for stockholders, and underlying asset performance
and value, may very likely deteriorate.
Last Wednesday, we learned that the Company delayed its record
date and annual meeting date by one month to March 20th and May 15th, respectively. It is
unclear to us what this achieves for a Board whose time has expired
multiple quarters ago.
We recently made a proposal to the Company to avoid a proxy
contest and preserve three of the existing Board members today
which was met with an abject refusal. We encourage you to urge the
existing Board to appreciate the situation and do the right thing
and seek to avoid an expensive proxy fight. We can be reached
at (212) 825-0400 or at evolvecampuscrest@clinton.com.
Thank you for your consideration,
Joseph A. De Perio
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/clinton-group-and-campus-evolution-villages-send-open-letter-to-stockholders-300042750.html
SOURCE Clinton Group, Inc.