Business

Ires activist plots boardroom coup in push for privatisation or break-up

Toronto-based Vision Capital is calling for an extraordinary general meeting in bid to replace five directors of the Republic’s largest private residential landlord

Ires Reit chief executive Margaret Sweeney, who signalled in October she plans to step down next year. Photograph: Nick Bradshaw

Joe Brennan
Mon Dec 18 2023 - 11:46

A Canadian activist investor in Ires Reit has called on the Republic’s largest private residential landlord to hold an extraordinary general meeting (egm), at which it aims to replace five directors and push through a resolution for the business to be taken private, sold or broken up over two years.

Toronto-based Vision Capital, owner of a 5 per cent stake in Ires and led by Jeffrey Olin, has lined up five prospective directors to replace group chairman Declan Moylan, chief executive Margaret Sweeney, chief financial officer Brian Fagan and two other board members.

Ms Sweeney signalled in October she plans to retire from her role next April. Vision said the egm should take place before her successor is picked.

Vision first took aim publicly at the Dublin-listed property company in April, when it called for the company to be sold, as its stock traded at a deep discount to its intrinsic value.

READ MORE

The Irish company resisted, saying it was not the right time to put Ires on the market as European commercial property assets were under pressure amid heightened interest rates. Still, it went on to sell close to €100 million of assets to raise cash to maintain sufficient headroom over its debt limit at a time of falling property valuations.

Vision said on Monday that it remains dissatisfied with the “overall management” of Ires, persistent weak share price, and limitations of the real-estate investment trust structure in Ireland.

“To mitigate this [valuation] gap and prevent further value destruction as a publicly traded entity, shareholders will be asked at the egm to pass a special resolution that requires Ires to proceed with a strategy that effectively results in either the privatisation of Ires or the sale of its assets either en bloc or over the course of two years,” the Canadian company said.

While Irish law allows shareholders behind 10 per cent of a company to require it to convene an egm, only 5 per cent is needed in the case of a business whose shares are listed on a regulated market.

Ires said its board views Vision’s actions as “part of a campaign to undermine the good governance of the company and to override normal corporate governance standards”. However, it said that it is looking into the validity of the egm request with advisers and will make a further announcement “in due course”.

The value of Ires’s net tangible assets, as measured under European Real Estate Association (ERPA) reporting standards, was €1.48 per share at the end of June. Ires shares closed on Friday at €1.04.

The five potential directors being lined up by Vision include: former Arthur Cox partner and property lawyer Mark Barr; one-time chief operating officer of Canada’s CIBC Bank Richard Nesbitt; erstwhile head of real estate equity research at Goodbody Stockbrokers Colm Lauder; Amy Freedman, an adviser to Canadian asset manager Ewing Morris; and Sharon Stern, president of Eastmore Management and Metro Investments in the US.

The two other existing Ires board members that Vision is targeting – aside from the chairman, CEO and CFO – are Joan Garahy and Tom Kavanagh.

Mr Lauder, who covered Ires for seven years before leaving Goodbody earlier this month and is an expert on the Irish reit regime, is seen by property industry sources as a potential full-time or interim CEO after Ms Sweeney exits.

Ires raised €96.5 million from asset sales this year in order to convince investors that it could maintain sufficient headroom over its debt limits at a time of falling commercial property valuations. The company is restricted by Irish real-estate investment trust (reit) laws to maintain a loan-to-value ratio of not more than 50 per cent.

The disposals, reducing its portfolio to 3,734 apartments and houses, lowered its loan-to-value ratio to 41.9 per cent.

Joe Brennan

Joe Brennan

Joe Brennan is Markets Correspondent of The Irish Times

LATEST STORIES