Ires defeats attempted boardroom coup at showdown egm

Ires Reit defeated an attempted boardroom coup at an extraordinary general meeting (egm) on Friday, as investors voted against a plan by an activist investor to replace five directors and secure a mandate to pursue a sale or break-up of the business.

However, the largest private residential landlord in State has pledged to proceed with a strategic review of its own, which will also look at a sale option, and provide feedback to investors before its annual general meeting on May 2nd.

Almost 60 per cent of votes at the egm were cast against resolutions put forward by activist investor Vision Capital to replace four of the five directors, including chairman Declan Moylan and chief executive Margaret Sweeney. A lower level of 53 per cent voted against Vision’s plan to replace group chief financial officer Brian Fagan.

The rebel shareholder’s resolution that would have directed the board to “use best endeavours” to pursue a sales or divestment process within two years was also defeated by a majority of 60 per cent.

Shares in Ires declined by 5 per cent to €1.04 in Dublin as the market digested developments.

Still, the level of shareholder dissension against directors will pile pressure on the board of Ires as it proceeds out its own strategic review, promised early last month and set to commence following the release of the group’s 2023 results next Friday. The company has pledged to look at a “full range of strategic options” to maximise value for shareholders, including consolidation, mergers, a review of the company as a listed Reit, the sale of the company or disposal of its assets.

Ires board member and incoming chairman Hugh Scott-Barrett, who succeeds Mr Moylan at the end of next week, told reporters after the egm that the company plans to issue a “substantive update” on the strategic review ahead of its annual meeting on May 2nd.

“We’re gonna move pretty quickly, because nine weeks to a substantive review is going to involve a lot of hard work on everybody’s part,” he said, adding the board will seek to identify the options that are both in scope and out of scope by the time of the egm.

Vision Capital vs IRES REIT: trouble brewing at Ireland’s largest private landlord

Asked whether Ires will have a preferred option by then, Mr Scott-Barrett said: “It’s difficult to tell at this stage. That tends to suggest that we don’t go into it with an open mind, which I do.”

Ires had vehemently resisted the notion of a sale when Vision began a public campaign against the board in April last year.

Mr Moylan acknowledged to reporters that the outcome of the egm vote, with about 40 per cent of votes cast in favour of Vision’s resolution advocating a sale or break-up, suggests there is a “a body of shareholders” who have an interest in an early liquidity event.

Ires refused to allow photographers and camerapeople from media organisations to enter the venue of the egm in a hotel in central Dublin on Friday.

Earlier, Mr Moylan told the egm that the board was “disappointed” it had to incur “significant costs” and the use of management time defending itself against Vision’s “unnecessary actions”. However, he added the board “will take all votes cast today into account into its deliberations following [the] egm”, as the company proceeds with a strategic review.

“I’d like to assure you that the company has always attempted to deal constructively with its shareholders, including Vision,” he said, adding that it would continue to work with Vision, which owns about 5 per cent of the company, in a “constructive manner”.

The head of Vision Capital, Jeffrey Olin, highlighted at the meeting – as part of a heated exchange with the chairman – that it was only after three years of engagement by his firm and its call for an egm, that the board actually announced it would commence a strategic review.

Vision has been of the view that flaws in Irish real-estate trust (Reit) rules, which require a high dividend payout rate, and Ires’s relatively high debt level compared to Reit limits, has limited what it can spend on development at a time of chronic undersupply of accommodation in the Republic.

The Canadian investor has also taken aim at how shares in Ires, which has 3,734 apartments and houses on its books, have traded for a sustained period at a significant discount to the intrinsic value of its assets.


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