Ires Reit said on Wednesday it “strongly refutes” claims by a Canadian activist investor that its existing board cannot be trusted to lead a strategic review of its business, as the Dublin-listed apartments owner urged shareholders to back the company in a crucial extraordinary general meeting next month.
Shareholders will vote at the meeting on February 16th on plans by Toronto-based Vision Capital, which has a 5 per cent stake in Dublin-listed Ires, to replace five directors with candidates it has put forward and secure a mandate to sell or break up the company within two years.
Ires, which owns 3,734 apartments and houses, announced earlier this month that it plans to commence a strategic review in late February, after it reports full-year results, as it seeks to ward off a boardroom coup attempt.
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This will include looking at potential mergers, the company’s status as a listed real estate investment trust (Reit) and the sale of the company or its assets in lots.
“The Ires board is concerned that a proposed board controlled by Vision director nominees will not be open and objective to alternative value maximisation outcomes in the interests of all shareholders and will be committed to execute the Vision ‘action plan’,” Ires said in a statement.
“The limited detail provided by Vision around its plan does not highlight for shareholders the risks (including strategic, operational efficiency, refinancing, tax and employee retention) in an accelerated sales process.”
Vision said in an open letter to Ires shareholders last week that, following discussions with property industry players in Ireland, a multipronged assets divestment approach could be taken on the Ires portfolio.
It said some of the trust’s higher-end properties would have “a strong bid at any time”, while “other properties with more affordable rents could be sold to Government or non-profit groups”. A portion of the remaining units could be sold individually to end users, it said.
“The board notes there is no Government policy to indicate that Vision’s stated objectives in this context can be achieved and asks shareholders to be cautious around Vision’s unattributed claims in this regard,” Ires said.
Ires insisted that a strategic review carried out by the current board, which will be led by incoming chairman and current director Hugh Scott-Barrett, “will be conducted in all shareholders’ interests”.
Vision said on Friday that it has received support from certain unnamed larger institutional shareholders and smaller Irish investors.
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