Ires Reit’s Canadian founder Capreit has continued to drip feed shares in the Irish property company into the market after a showdown extraordinary general meeting (EGM) last Friday in which an attempt at a boardroom coup was defeated.
Capreit, which assembled Ires’s initial portfolio of 338 apartments and managed its initial public offering (IPO) in 2014, has cut its stake in the Dublin-listed company to 18.1 per cent as it sold shares on Friday and Monday, according to Stock Exchange filings. It comes after Capreit moved earlier this month to reduce its interest to 18.5 per cent from 18.7 per cent.
The investment firm had backed failed efforts by an activist investor, fellow Toronto-based Vision Capital, at last week’s EGM to replace five Ires directors and secure a mandate from shareholders to pursue a sale or break-up of the company, which now has 3,734 residential units, within two years.
Almost 60 per cent of votes at the EGM were cast against resolutions put forward by activist investor Vision Capital to replace four of the five directors, including chairman Declan Moylan and chief executive Margaret Sweeney.
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A lower level of 53 per cent voted against Vision’s plan to replace group chief financial officer Brian Fagan. Mr Moylan and Ms Sweeney plan to step down from the respective roles in the coming months.
The rebel shareholder’s resolution that would have directed the board to “use best endeavours” to pursue a sales or divestment process within two years was also defeated by a majority of 60 per cent.
[ Ires defeats attempted boardroom coup at showdown egmOpens in new window ]
Still, the level of shareholder dissension against directors will pile pressure on the board of Ires as it proceeds out with its own strategic review, promised early last month and set to commence following the release of the group’s 2023 results on Friday.
The company has pledged to look at a “full range of strategic options” to maximise value for shareholders, including consolidation, mergers, a review of the company as a listed Reit, the sale of the company or disposal of its assets.
Capreit earned almost €50 million in asset and property management fees from Ires between the IPO and a move by the Irish company to bring management in-house two years ago.
Real estate investment trusts such as Ires are typically set up with the founding property company managing the underlying assets by contract through a fund management vehicle.
The Irish Times reported on February 1st that Capreit had sought a significant hike in potential fees from Ires in talks in late 2020 to extend an asset management contract, before the company decided to internalise management of the portfolio.
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