The board of Ireland's largest private landlord, I-RES REIT, has been backed by an influential shareholder advisory firm ahead of a crunch extraordinary general meeting later this month.
The news that ISS has recommended that shareholders vote against all resolutions proposed by activist shareholder Vision Capital at the EGM on February 16th has been welcomed by I-RES.
"The I-RES Board continues to recommend Shareholders vote against all resolutions proposed by Vision at the forthcoming EGM," I-RES said in a short statement this morning.
Vision is proposing that I-RES be required to consider a comprehensive strategic review to assess options, including a sale of the company or its assets, or a process to sell I-RES or its assets in an organised manner over the next two years.
It is also proposing that five members of the board of I-RES be replaced with candidates that are supported by Vision Capital, which owns 5% of the business.
Vision itself received a boost a week ago after I-RES’s largest shareholder said it was backing Vision’s position.
Canadian property fund, Capreit, which owns 18.7% of I-RES, confirmed it intends to support Vision Capital’s resolutions at the upcoming EGM.
I-RES has already said it will begin its own strategic review in the first quarter of this year after it reports full year results for 2023.
This will consider all strategic options available to maximise the inherent value contained within the IRES portfolio, it said.
These include but are not limited to new strategic initiatives, consolidation, combinations, mergers or other corporate action, a review of the company's status as a listed REIT, the sale of the entire issued share capital of the company and selling the company’s assets and returning value to shareholders.
"The move by ISS represents a significant moment in the context of the current debacle. ISS exerts significant influence in the context of institutional investors’ voting decisions in these situations and this development will be helpful in the context of the IRES Board’s bid for shareholder supports," wrote John Cronin, analyst at stockbrokers Goodbody in a research note this morning.
"It certainly raises the bar in the context of Vision’s quest to achieve approval for a special resolution to pursue a large-scale asset divestment programme (though Vision’s latest missives indicate more open-mindedness in this respect anyway, which, we suspect, is the position of all of the Nominee Directors too)."
"However, the lower threshold with respect to achieving approval for Director removals / appointments means the likely outcome in this respect is still much less certain."
