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Are days numbered for last Irish reit as it bows to ‘strategic review’?

Nation’s biggest private landlord under pressure from activist investor

Ires Reit is led by chief executive Margaret Sweeney. Photograph: Nick Bradshaw

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Cantillon
Tue Jan 9 2024 - 06:00

Apartments owner Ires Reit, which was publicly urged by a Canadian activist investor last April to put itself on the block, has opted for a “strategic review” as the gadfly investor plots a boardroom coup to get its way.

The real-estate investment trust (reit) said on Monday its review will include “new strategic initiatives, consolidation, combinations, mergers or other corporate action, a review of the company’s status as a listed reit, the sale of the entire issued share capital of the company, and selling the company’s assets and returning value to shareholders”.

It has no option but to concede to holding an extraordinary general meeting (egm) next month on proposals from Toronto-based Vision Capital to replace five company directors and conduct a review that would lead to the sale within 24 months of the company’s 3,734 homes – as a whole or in lots.

Ires argued its review is “better”, as it doesn’t have a predetermined outcome and will be led by an independent board. It highlights that three of Vision’s five director nominees have links either to the Canadian firm or another activist investor, Ewing Morris, to which it is aligned.

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Vision is merely trying to “obtain control of the board” and “force through” a sale or liquidation within a strict time frame that is akin to a “distressed sale”, irrespective of market and other conditions, Ires says.

Still, Goodbody Stockbrokers analyst John Cronin pointed out in a note to clients that “it is difficult to see how Vision Capital has anything but the best interests of shareholders in mind in a shareholder value maximisation context”.

The problem for investors considering backing a company-led review is that they don’t know who will preside over the outcome. Ires’s chairman, Declan Moylan, and chief executive, Margaret Sweeney, plan to leave the company in the coming months.

Moylan said at last year’s annual general meeting that it was not the right time for the company to be put on the market, with rising interest rates at the time weighing on property values. The company has not received any approaches from potential suitors in the meantime. But with euro zone interest rates widely expected to fall this year, might bidders emerge, resulting in Ires following all the other Irish reits off the stock market?

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