Board of Ires REIT trade blows with activist investor over direction of the company

Irish Residential Properties Reit (Ires) chair Declan Moylan with retiring company chief executive Margaret Sweeney at the company's AGM last May.

The board of the country’s largest private landlord Irish Residential Properties Reit (Ires) has accused an activist investor shareholder, seeking additional control over the company, of publishing a “misleading” letter containing “inaccuracies” ahead of its EGM next month.

This is just the latest volley of attacks between the board of Ires and the firm Vision Capital which is seeking a number of changes to the landlord. On Thursday, Vision Capital published a letter refuting a number of accusations raised by the board of Ires to which the board has now fired back.

Vision Capital owns 5% of Ires and in December it requisitioned the company to convene an EGM for shareholders to consider and vote upon the removal and replacement of five directors of the Ires board of directors.

The firm is also seeking a review which could result in a forced sale of the Ires and its assets so that it is no longer publicly traded within the next two years.

The board of Ires recommended shareholders reject Vision Capital’s resolutions saying that by seeking five of the nine available board seats it is looking to take control of the company from a minority position and force the liquidation of the company.

The board said that this puts the value of the company and its assets at risk. Early last week, it published a circular to its shareholders laying out its opposition to Vision’s resolutions.

Vision’s letter on Thursday refuted a number of accusations made by the board saying many of its claims, including a number made in a circular Ires published, were “misleading”.

It said its resolutions only require the board to use its “best endeavours” to affect a value-maximising transaction when it comes to a potential sale of the company.

It also pushed back on suggestions by the board that its nominees for the board lack independence saying this is “unfounded” saying they “possess exceptional expertise, competence, and independence, aligning with UK Corporate Governance Code standards”.

In response, the board of Ires said Vision’s letter is “misleading” and contains “inaccuracies and depends on unsupported statements attributed to unidentified third parties”.

It said that it stands by the circular it published last week in support of its position.

“The Vision Response highlights the risks to shareholders of implementing Vision’s narrowly focused plan to sell the company or its assets,” the board said.

“As set out in the circular, Ires has sought to engage constructively with Vision and avoid the unnecessary costs and potential damage which Vision’s actions risk for I-RES’ shareholders.” 

The board also said that the Vision letter is under legal view and it will respond in due course ahead of the EGM which is due to take place on February 16.

It pointed out that Ires is subject to more stringent rules as a public company than Vision which has “no such requirement or standard to which they must adhere”.

The board continues to recommend that Ires shareholders vote against Vision’s resolutions.

Earlier this month, the board announced a comprehensive strategic review to consider the full range of strategic options in order to maximise the value for shareholders.

This could include new strategic initiatives, consolidation, combination, merger or other corporate action, a review of the company’s listed status, the sale of the entire issued share capital of the company, and selling the company’s assets and returning capital to shareholders.

This review will commence sometime over the next three months after the company posts the full year results for 2023.

Ires owns 3,734 apartments and houses for private rental in Dublin and Cork.