Voting for the resolutions is a vote for meaningful change to maximise value for ALL shareholders.
DUBLIN, Feb. 5, 2024 /PRNewswire/ — Vision Capital Corporation, together with its affiliates, (collectively referred to as “Vision“) a significant shareholder of Irish Residential Properties REIT plc (ISE: IRES) – (“IRES,” the “REIT“, or the “Company“), owning over 26 million ordinary shares representing approximately 5.01% of IRES’ ordinary shares, is disappointed and concerned with the ISS Analysis1 utilised in the Institutional Shareholder Services’ (“ISS“) report released on February 1st, 2024, pertaining to the upcoming IRES extraordinary general meeting (the “ISS Report“) and hence objects to the conclusions ISS has reached.
Notwithstanding the lack of support from ISS for the resolutions at the extraordinary general meeting scheduled for February 16th, 2024, (the “EGM“), Vision has received the support of several independent institutional and individual shareholders. This includes the support of Canadian Apartment Properties REIT, which is both the founding and largest shareholder of IRES.
1 ISS Report Analysis sections on pages 11-14 and page 16.
Vision reminds IRES’ shareholders that if they wish to see meaningful change at IRES to maximise value for all of IRES’ shareholders, they should vote “FOR” all the resolutions put forth by Vision.
After three years of active and constructive engagement by Vision with the IRES Board of Directors (the “Current Board“), which was extensively documented in the public realm, ISS summarised the ISS Report in two brief conclusions:
- Within the limitations imposed of international comparisons, the Company has mostly performed in line with peers or even outperformed in some aspects; and
- The Board appears to have adequate skills to run the strategic review, and it has made a commitment to a full review of strategic alternatives.
Unfortunately, the conclusions drawn by ISS overlook the three fundamental issues that are integral to the important matters forming the basis of and reflected in the resolutions on the agenda for the EGM:
- Irrespective of the views of Vision, IRES, or ISS, it is clear that the marketplace has concluded that the REIT structure in Ireland has not been an effective or viable structure for shareholders for years. Accordingly, and with the sole exception of IRES’ misaligned and entrenched Current Board, the boards of all Irish REITs have recognised this reality and have taken expeditious action to advance transactions which resulted in valuations at or exceeding their IFRS valuations. Neither IRES nor ISS, as discussed in the ISS Analysis, recognise this fact. Importantly, IRES has not committed to ending the status quo and ceasing operations as an Irish-listed REIT – which is a significant differentiating factor between Vision’s recommendations proposed for the EGM agenda and the approach advocated by IRES. This lack of commitment exposes IRES and its shareholders to continued value erosion. The Current Board and management team are empowered to continue enriching themselves at the expense of IRES and its shareholders without commitment to a resolution of this most critical issue.
- In this specific context, and more generally, the difference between real estate and other asset classes lies in the significantly larger scale and breadth of investors and capital in the private property market compared to the publicly listed sector. There exists an arbitrage opportunity between these two markets. Consequently, the comparisons of operating and financial metrics, often restricted to arbitrary three to five-year periods and extended to publicly listed REITs in other jurisdictions with different property fundamentals, hold little relevance. Instead, the primary focus should be on assessing the value of IRES’ multifamily apartments within the private property market in Dublin. This fundamental and paramount consideration forms the crux of the current opportunity for shareholders at the EGM, which is completely overlooked in the ISS Analysis and its related recommendations.
- In the ISS Analysis, and the recommendations highlighted therein, ISS comments on the Current Board appearing to have adequate skills. However, the report does not address the complete misalignment of interest, which is a fact reflected by the combined di minimis share ownership by the Remaining Non-Executive Current Directors of approximately 228,000 ordinary shares, or 0.04% of the shares outstanding, and the Current Board’s demonstrated entrenchment2. The lack of alignment coupled with continuing entrenchment which Vision and other independent institutional and individual shareholders who have been actively engaged over the past three years have encountered, and has been outlined in detail by Vision, has resulted in significant support for Vision’s recommendations, all of which is ignored in the ISS Analysis and recommendations. This disregard undermines the significant support for Vision’s recommendations.
2 As defined and documented extensively in Vision’s press releases dated 12 April 2023, 24 April 2023, 18 January 2024, and 29 January 2024. Please click here to find downloadable PDF versions of these press releases.
The ISS Analysis has also overlooked or misstated other issues of relevance to this matter including for example:
- The failure to recognise that the director nominees proposed by Vision are independent, including pursuant to the UK Corporate Governance Code.
- The inclusion of the reference to a distressed sale, which is an inflammatory term utilised by IRES and repeated by ISS in the ISS Analysis is a completely misleading reference to the specific resolution on the EGM agenda recommended by Vision. Contrary to the inflammatory language used, as clarified several times in our various publications since the misleading IRES Circular dated January 8th, 2024, Resolution 4 of Vision’s EGM requisition letter specifies that the IRES Board should use its “reasonable” and “best endeavours” to advance a transaction either en-bloc, or over two years. Therefore, the ISS Analysis, which forms the basis for their recommendations, not only lacks accuracy but is also misleading.
For the benefit of all shareholders collectively, we strongly encourage IRES shareholders to act now by voting “FOR” each of the resolutions advanced by Vision at the EGM well in advance of the voting deadline of 11:00 a.m. on 14 February 2024.
Vision has retained the services of shareholder-advisory firm Morrow Sodali. While Vision is not soliciting proxies for the February 16th, 2024, EGM, Vision encourages any IRES shareholder who shares its concerns or has any questions, to contact Morrow Sodali at +44 208 089 3286, or 1.888.777.2092 toll-free in North America (+1.289.695.3075 collect), or by e-mail at email@example.com for further assistance.
No Offer or Solicitation
This press release is not intended to, and does not, constitute or form part of any offer, invitation, request to cooperate or solicitation in respect of any securities or the solicitation of any vote, approval or cooperation in any jurisdiction. The release, distribution or publication of this announcement in jurisdictions outside of Ireland may be restricted by laws of the relevant jurisdictions, and therefore persons into whose possession this announcement comes should inform themselves about, and observe any such restrictions. Any failure to comply with the restrictions may constitute a violation of the securities law of any such jurisdiction.
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