The board of Ires Reit has received a boost from an influential investor advisory firm ahead of an extraordinary general meeting (egm) this month, where an activist investor is pushing for a boardroom coup and mandate for the property company to be sold or broken up.
Institutional Shareholder Services (ISS), a leading international firm that recommends how large investors should vote at meetings, urged clients to vote against all resolutions being put forward by the rebel 5 per cent shareholder Canada-based Vision Capital, ahead of the egm on February, 16th.
The Vision resolutions seek to replace five existing directors, including chairman Declan Moylan and chief executive Margaret Sweeney with candidates it is putting forward.
They are also looking for approval to proceed with a strategic review process that would result in a sale or break-up of the company within the next 24 months. Vision has secured the backing of Ires’s founding and main shareholder, Toronto-based Capreit, which owns 18.7 per cent of the company.
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Vision argues that Ires’s ineffectiveness as a publicly traded platform has left it trading for a protracted period at a discount to the inherent value of its portfolio of 3,734 apartments and houses.
Ires announced in early January that it plans to start its own strategic review later this month, as it seeks to ward off the boardroom overhaul attempt. This review would include looking at potential mergers, the company’s status as a listed real-estate investment trust (reit) and the sale of the company or its assets in lots.
ISS said Ires has “mostly performed in line with peers or even outperformed in some respects” in recent times.
It noted that the Ires’s total shareholder returns – including share price gains and dividends – had outperformed the European peer median in the three years before Vision started publicly agitating for change last April. It had also performed better since April, “though this is likely reflective of market expectations of a corporate event since launch of the activist campaign,” it said.
ISS also said the current board “appears to have adequate skills to run the strategic review, and it has made a commitment to a full review of strategic alternatives”.
In a statement on Friday morning, Ires said it welcomed the ISS decision and reiterated its recommendation for shareholders to vote against all resolutions proposed by Vision later this month.
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