After lengthy negotiations, activist investor Vision Capital has succeeded in getting Ires Reit to support two of its proposed overseas director nominees, averting a potential clash at the forthcoming annual general meeting (AGM) of the company. This comes despite Ires Reit’s refusal to endorse the third nominee, Colm Lauder, a property specialist based in Ireland and former company stockbroker analyst. He was voted for by 46.4% of participants, representing the highest number of votes among the five Vision candidates during an extraordinary general meeting (EGM) in February.
Ires Reit had previously stated ahead of the EGM that Lauder did not possess adequate Irish property management or any public company experience. On the contrary, the International Shareholder Services (ISS), a well-known shareholder advisory firm, claimed that he is highly informed about the Irish property market and advised shareholders to reject all Vision proposals during the EGM.
Lauder, who previously worked as a property analyst for Goodbody Stockbrokers, expressed surprise at the effective block on his candidacy as part of the arrangement. He claimed that his exclusion by the Ires board displays a further discrepancy between shareholder objectives and interests.
According to some insiders, Vision Capital was primarily focused on having Lauder appointed at the AGM, considering that he was the third candidate on the list during the EGM.
Ires Reit has refrained from commenting on the matter.
Vision’s compromise nominees consist of Richard Nesbitt, former chief operating officer of Canada’s CIBC Bank, and Amy Freedman, advisor to Canadian asset manager Ewing Morris. Both were nominated by Vision in February when all its resolutions, including a call for the company to consider a sale or split within two years, were rejected.
The AGM, initially scheduled for May 2nd, has been pushed back to May 10th to allow for the revision of the necessary documents. As of last Friday, it was reported that Vision was planning on proposing three nominees, leading to a stalemate.
Additionally, Vision has decided to withdraw a request for a refund totaling up to €425,000. This amount corresponds to the costs incurred during its year-long campaign against the Ires board.
Vision has agreed not to instigate or take part in any additional shareholder activism movements until after the 2025 annual general meeting of the company. The current CEO of Ires, Margaret Sweeney, is set to retire on the 1st of May, whereas the previous chairperson, Declan Moylan—who was replaced by fellow board member Hugh Scott-Barrett in February—will leave at the agm.
Ires’s CFO, Brian Fagan, will step down as a director to avoid breaching the maximum nine-member limit set out in Ires’s constitution. However, Mr Fagan’s role as CFO remains secure. The recently appointed CEO, Eddie Byrne, officially began his tenure within the company on Monday.
The board pledges to continue the strategic review it agreed to conduct early this year as a deterrent against Vision. Hugh Scott-Barrett commented, “Our Co-operation agreement with Vision offers a solid framework for value maximisation for our shareholders. It allows our board and senior management to concentrate on the strategic review, CEO handover, and the company’s robust operational performance. We anticipate informing our shareholders on the strategic review’s developments prior to our agm in May.”
Jeff Olin, the president and CEO of Vision, expressed satisfaction with the proposed appointments of Richard Nesbitt and Amy Freedman, and said, “We eagerly await the results of the strategic review and the optimisation of the value inherent in Ires for all stockholders.”
Vision, a Canadian investment company, who owns roughly 5% of Ires’s shares, has long argued that flaws in the Irish Reit regulations—which demand a high dividend payout rate—and Ires’s comparably high debt ratio compared to Reit ceilings, have restricted what it can invest in development at a time when there’s a severe shortage of accommodation in the Republic.
The Canadian investor criticised how Ires’s shares, with their portfolio of 3,734 flats and houses, have continuously been traded at a notable discount compared to the inherent value of their assets.