A major shareholder in Ires Reit, Ireland’s largest landlord, has written a scathing open letter to the board demanding the company be taken private after years of poor stock market performance.
Vision Capital, a long-term shareholder in Ires Reit with a 4.75pc stake, said the company had become an “ineffective platform” that was failing to address the interests of shareholders or the Irish housing market.
The Canadian fund, which has $900m under management, said that it has been frustrated in its efforts to have its concerns addressed despite bringing them to the board’s attention repeatedly since 2021.
It said it would be voting against the re-appointment of four directors, including executive chair Declan Moylan and chief financial officer Brian Fagan, and is urging fellow shareholders to join in voting down key resolutions at the upcoming agm.
“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,” the letter states.
“Vision is concerned that the IRES Board and management are choosing not to address fundamental structural issues, while at the same time benefiting greatly and disproportionately from the company's compensation structure, which disincentivises them from pursuing the required structural changes.”
The board of Ires Reit issued a short statement to the Irish Stock Exchange saying it was “reviewing the content of the letter and will respond in due course”.
Last week shares in Ires fell to an all-time low of €0.93 - below the IPO price – despite record high rents and demand for housing, due to its limited prospects for further growth.
The price put Ires Reit’s market value at just €490m, or 42pc below the €850m its 4,000 apartments and other real estate holdings were assessed to be worth at the end of December.
Vision, a shareholder since Ires Reit’s initial public offering in 2014, said it approached the board in July 2021 seeking “value-maximizing transactions”, essentially believing that selling its property would be more financially rewarding than continuing to rent it.
But the directors ultimately decided not to change strategy, according to Vision’s account of the discussions, which claims the fund had been “continually misled, cajoled and stymied in our efforts”.
Vision is also objecting to Ires Reit’s compensation structure, which it says disincentivises the board and management from making the required changes that it believes would deliver more value to shareholders.
It is trying to persuade other shareholders, including founders and 18.7pc owners CapReit, to vote against the remuneration committee as well as resolutions changing the company’s share incentives scheme.
