Ireland's Biggest Resi Landlord Explores Sale Amid Continuing Battle With Shareholder
Irish Residential Properties REIT is to undertake a strategic review that will include a potential sale of the company as its battle with an activist shareholder continues.
Ires has recommended shareholders vote against all resolutions at an upcoming extraordinary general meeting requested by activist investor Vision Capital and said that it will begin a “comprehensive, strategic review” led by the board to consider a full range of strategic options.
Ires issued a notice of EGM to shareholders following a requisition notice received from Vision Capital, a 5% shareholder, on 18 December.
However, Ireland’s largest residential REIT, which has a market capitalisation of €575M and a portfolio valued at €1.4B, slammed the proposals and laid out its own plans to evaluate the business and the best way forward.
“The resolutions, put forward by Vision, seek to take control of the company by seeking five of the nine existing board seats, and to force the total liquidity of Ires within two years,” the company said in a statement.
“The board believes this seriously risks the value inherent in the assets and the platform of Ires in forcing a risky and potentially value destructive approach that, while it might be in the interests of Vision, is not in the interests of shareholders as a whole.”
A promised strategic review will commence this quarter, post the announcement of 2023 full-year results and consider all strategic options available to maximise the inherent value contained within the portfolio, the company said.
The options 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.
“The Ires board has, following extensive and considered discussions internally and over the last couple of months with a number of shareholders, including Vision, concluded that now is an appropriate time to commence a strategic review,” the company said. “The timing also reflects early signs that 2024 may see moderating inflation, improved interest rate expectations and greater financial market stability which offers Ires more flexibility in considering options.”
Ires is to establish a special committee to initiate the strategic review and retain specialist international financial and real estate advice to assist with the process.
Outlining its reasons to oppose the proposals, Ires said the board and management had taken the right strategic decisions over several years to maximise value for all shareholders, adding that the company had repositioned to a fully integrated business with effective asset management and capital allocation, strengthening its balance sheet and portfolio quality.
Pointing out that Vision is a minority shareholder, which it said should not carry control rights, it said the Vision resolutions have been put forward “principally as a means by which it can obtain control of five of the nine existing board seats without paying shareholders a premium or a fair price for obtaining control of the company.”
It also claimed that Vision has not articulated an alternative business or operational strategy for the company beyond a liquidation or a sale.
“Vision’s sole objective appears to be to create a forced liquidity event to serve its own interests through a sale of Ires or its assets or a liquidation within 24 months, irrespective of market and other conditions,” Ires said. “By rejecting the Vision resolutions, all shareholders will benefit from the outcome of a rigorous strategic review [which] will include a sale of the business or of its assets as two of several options to be assessed rather than the only predetermined options.”
