Irish Residential Propererties REIT (IRES) has hit back at activist investor Vision Capital which proposed voting against board resolutions and potentially backing a sale of the business.
Vision Capital owns over 25 million ordinary shares in the firm, representing around 5.0% of IRES' ordinary shares. The REIT has an annual general meeting (AGM) scheduled for 4 May when a number of issues will come up for vote.
In its letter dated 12 April, Vision said that it believed that IRES has 'increasingly become an ineffective platform and continues to poorly address the interests of both its shareholders and the critical needs of the Irish housing market'.
The letter went on to suggest that 'IRES is a platform that can be a significant provider of housing stock in Ireland' and that its 'current corporate structure as a publicly-traded REIT has many inefficiencies that hinder it from being a more relevant and viable entity to ...address the severe housing shortage in Dublin'.
The letter said: 'Vision believes that there exists a distinct and significant opportunity for Ireland should IRES cease to be a public company and continue to operate privately with a different corporate and capital structure, which would have the corresponding benefit of value creation for IRES and its shareholders.'
Vision stated it would be voting against the election of several directors and resolutions relating to remuneration and shareholder rights, and asked other shareholders to help stop IRES from disapplying pre-emption rights, plus other matters.
In a written response, IRES rejected Vision's proposals in full, and noted that the share price has outperformed the listed European Real Estate sector (STOXX Europe 600 Real Estate Index) by 6.4% since December 2021.
The response also rejects criticism of business performance maintaining that it delivered 'strong operational and financial results' last year. It also pointed out that a non-core disposals programme in excess of €100 mln was ongoing.
IRES rejected the take private proposal and said it would 'seek to return excess capital to shareholders, where appropriate in an efficient manner'.
The IRES board said it unanimously recommended that shareholders support all proposed resolutions at the AGM on 4 May.
