Ires Reit has agreed to back two overseas-based director nominees being put forward by activist investor Vision Capital in a compromise, following a weekend of intense negotiations, that avoids another showdown at the company’s upcoming annual general meeting (agm).
Still, the listed apartments owner refused to support the nomination of Colm Lauder, an Irish-based property expert who had won the most votes — at 46.4 per cent — among five Vision nominees put before an extraordinary general meeting (egm) in February.
While Ires highlighted before the egm that Mr Lauder, a former stockbroker analyst of the company, lacked demonstrable Irish property operational or management experience and has no public company experience, influential shareholder advisory firm International Shareholder Services (ISS) said he was “clearly knowledgeable about the Irish real estate market”. ISS urged investors to vote against all of the Vision resolutions at the egm.
Mr Lauder, a former property analyst with Goodbody Stockbrokers, said it was a “surprising decision” to effectively veto his nomination as part of the settlement. “I was the most popular [Vision] candidate in February. My exclusion by the Ires board is an example of further misalignment of shareholder intentions and interests.”
Sources said that Mr Lauder was the number-one candidate that Vision was seeking to have appointed at the agm. He had been number three on the list at the egm.
An Ires spokesman declined to comment.
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The compromise nominees are one-time chief operating officer of Canada’s CIBC Bank Richard Nesbitt and Amy Freedman, an adviser to Canadian asset manager Ewing Morris. Both were put forward by Vision in February when all of its resolutions, including one that called for the company to pursue a sale or break-up of the business within two years, were defeated.
The agm, originally scheduled for May 2nd, has been postponed until May 10th to facilitate the preparation of revised documentation. Ires had said last Friday that Vision was intent on putting three nominees forward as both sides hit an impasse.
Meanwhile, Vision has withdrawn a request that it secure a refund of as much as €425,000 of costs related to its year-long campaign against the board of Ires.
Vision has agreed to a standstill on initiating or participating in any further shareholder activist campaigns until after the company’s 2025 agm. Ires’s current chief executive Margaret Sweeney is due to step down on May 1st, while former chairman Declan Moylan — who was succeeded by fellow board member Hugh Scott-Barrett in February — will exit at the time of the agm.
Ires chief financial officer Brian Fagan will step down as a director to ensure the board does not breach the maximum of nine members permitted under Ires’s constitution. Mr Fagan’s position as chief financial officer is not affected. Chief executive designate Eddie Byrne started officially with the company on Monday.
The board is continuing with a strategic review it committed to carrying out earlier this year to ward off Vision.
“The Co-Operation Agreement with Vision provides a constructive framework to address the maximisation of value for shareholders,” said Mr Scott-Barrett. “It enables the board and management to fully focus on the strategic review, the CEO [chief executive] transition and the continued strong operating performance of the business. We look forward to updating shareholders on the progress of the strategic review in advance of our agm in May.”
Vision president and chief executive Jeff Olin said: “We are pleased with the proposed appointments of Richard Nesbitt and Amy Freedman. We look forward to the outcome of the strategic review and the maximisation of the value inherent in Ires for all shareholders.”
Vision, which owns about 5 per cent of Ires, has long 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, have limited what it can spend on development at a time of chronic undersupply of accommodation in the Republic.
The Canadian investor had also aimed 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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