Ires directors ride out revolt as dissident investor vows to pursue egm

Ires Reit’s chief executive, Margaret Sweeney, and chief financial officer, Brian Fagan, managed to survive a shareholder revolt at the listed apartment owner’s annual general meeting (agm) on Thursday.

However, the head of activist investor Vision Capital, who had sought to enlist investors to vote against the two executives and three other directors, insisted that he would proceed with a call on the State’s largest residential landlord to hold an extraordinary general meeting (egm) as he continues to press for a sale of the company.

Shareholders voted by a majority of almost 64 per cent against the company’s pay policy, in what is seen by market observers as an embarrassing outcome, even though its say-on-pay is only a non-binding, advisory resolution.

Some 38.5 per cent of investors who took part in the vote on Ms Sweeney’s re-election cast ballots against her return to the board, while 45.7 per cent voted against Mr Fagan.

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However, Vision did not glean as much support as had been expected in its call on fellow investors to back it in voting against three non-executives, including chairman Declan Moylan. Between 10.1 per cent at 13.7 per cent of shareholders voted against all three.

Mr Moylan had told shareholders attending the agm that “there could not be a worse time to sell” the company as commercial property assets across Europe remain depressed amid rising interest rates, and 2 per cent annual cap on residential rent increases remains in force in rent pressure zones in the Republic.

Shares in Ires have rallied from an all-time low of 93 cent last month to €1.01 as of Thursday. However, they continue to change hands at a 37 per cent discount to their net asset value.

“Despite the macro challenges we face ... the board has confidence in the strategy and in the management of this business, and believe it will be reflected by the market in due course,” Mr Moylan told the agm.

However, Toronto-based Vision Capital’s chief executive, Jeffrey Olin, described Ires as a “lame duck” real-estate investment trust (reit) as he posed a series of questions to the chairman during the meeting. He plans to use his 5 per cent vote to get the board to call an egm to allow shareholders to vote on “alternatives”.

Vision Capital has been waging an open battle against Ires for the past three weeks, after Ires resisted its calls, initially made in private, to put itself up for sale as its stock has traded consistently at a discount to the value it puts on its assets.

Vision said before the agm that it had enlisted the support of Ires’s founder, Toronto-based property group Capreit, which has an 18.7 per cent stake, and a number of other investors. However, it was clear from the results of the agm that Capreit did not back Vision in all of the resolutions.

Shareholders voted by a narrow majority against two special resolutions at the agm that were aimed at giving directors the authority to disapply pre-emption rights for existing investors to buy shares in the event it were to issue a limited amount of stock to raise cash or carry out an acquisition or a specified capital investment.