IRES REIT Survives AGM Revolt But Votes Leave More Questions Than Answers

IRES REIT CEO Margaret Sweeney and Chief Financial Officer Brian Fagan survived a close-run shareholder revolt at the company’s AGM on 4 May but the threat of an EGM still looms for the residential giant.

And the management team was put on notice by the scale of the opposition aligned against it, leaving Chairman Declan Moylan to consider whether the company will need to make concessions to dissident shareholders if it is to stave off a full-scale revolt.

Shareholders voted by a majority of almost 64% against the company’s pay policy, though that was a nonbinding, advisory resolution.

Meanwhile 39% of investors who took part cast ballots against Sweeney’s re-election, and 46% voted against Fagan.

That meant that both have won re-election two years running with lukewarm support.

Vision Capital CEO Jeffrey Olin — the activist investor who had attempted to enlist other investors to vote against both, plus three other directors — insiste  that he would proceed with a call for an EGM, or extraordinary general meeting, as he presses for the sale of the company amid claims that it has underperformed.

Vision failed to amass the same support to vote against the three nonexecutives, including Moylan, with only between 10% and 14% of shareholders voting against all three.

Chairman Moylan had warned the AGM, or annual general meeting, that “there could not be a worse time to sell” the company as commercial real estate asset prices across Europe remain depressed.

Shares in IRES have recovered from an all-time low of 93c in April to around €1.01 in trading on 5 May, but continue to sit around 31% down on their value year-on-year, trading at a 37% 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,” Moylan told the AGM.

However, Olin — who has been waging an open war against IRES for the past three weeks and had made public his discontent — blasted IRES as a “lame duck” as he questioned the chairman during the meeting.

Vision Capital plans to use its 5% vote to get the board to call an EGM to allow shareholders to vote on alternative options and claimed before the AGM that it had enlisted the support of Toronto-based IRES founder investor CapREIT, which holds a 19% stake, plus other key investors.

However, the results of the AGM revealed that CapREIT had not backed Vision Capital across all of the resolutions.