Ires Reit’s largest shareholder, Thames River Capital, said the agreed €731 million sale of the residential landlord is “bittersweet” but “hard to turn down”, as it erases the discount that the shares had been trading on the stock market.
The Dublin-listed real-estate investment trust (Reit) said on Monday it had accepted a €1.386 per share offer from US asset manager Barings, including an offer price of €1.3651 plus a 2.09 cent dividend. It was in line with a Barings proposal announced by Ires on September 28th.
It marks a 31 per cent premium above where Ires shares were trading before news of Barings’s interest and is broadly in line with the company’s reported net tangible asset value per share as of the end of June. Ires, led by chief executive Eddie Byrne, has more than 3,600 rental homes.
“This is the latest example of how a wide discount to asset value can act as an invitation – and Barings has accepted it,” said Marcus Phayre-Mudge, head of property investment with Thames River Capital, a specialist real-estate investment arm of Columbia Threadneedle.
RM Block
“For us, it is bittersweet. We still believe in Ires, and we would happily have owned it for longer. But an offer at full asset value is hard to turn down.”
Thames River owns about 8.1 per cent of Ires Reit, having first disclosed early last year that it had breached the normal 3 per cent disclosure threshold.
The Barings approach came three years after Ires became the subject of a failed campaign, led by then-dissident investor Vision Capital, for the company to be sold or broken up, following years of share price weakness. Vision sold down its stake after reaching a truce in 2024.
Shares in Ires had risen by as much as 25 per cent in the first half of this year amid changes to the State’s rent rules. The new rent legislation, which came into force in March, overhauled the former rent pressure zone system, allowing landlords to reset rents to market rates between tenancies.
However, market expectations of a fresh series of interest rate hikes – as central banks tackle inflation – saw Ires’s shares falling from those highs in the three months before the company confirmed the bid approach.
Ires Reit chairman Hugh Scott-Barrett said on Monday the company has strong growth prospects after delivering consistent performances in recent years.
“Despite these results and the significant progress made against our strategic objectives, Ires, like many in the listed real estate universe, has traded at a persistent discount to its prevailing [net tangible assets] per share, which the Ires board believes does not fully reflect the underlying quality and performance of the business,” he said.
Phayre-Mudge said the board’s own explanation for recommending the offer is telling.
“Ires’s size, combined with a stubborn discount, made it hard to raise equity and grow,” he said.
A reit called GDL Management Group floated in Dublin at the end of August. However, this was the result of a technical listing to comply with Irish reit rules and the company’s shares have yet to trade.
The three other property trusts that floated in Dublin following the introduction of reit legislation in 2013 – Green Reit, Hibernia Reit and Yew Grove Reit – were all subsequently acquired off the market.
