Vision Capital Corporation has Requisitioned an IRES Extraordinary General Meeting to Vote on Replacing Five Directors and Initiating a Strategic Review

51 Vision Capital Corporation has Requisitioned an IRES Extraordinary General Meeting to Vote on Replacing Five Directors and Initiating a Strategic Review
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DUBLIN, Ireland, Dec. 18, 2023 /CNW/ – Vision Capital Corporation (together with its affiliates, “Vision“) a significant shareholder of Irish Residential Properties REIT plc (“IRES“) owning over 26 million ordinary shares representing approximately 5.0% of IRES ordinary shares, announced today that it has requisitioned that IRES convene an extraordinary general meeting (the “EGM“) for IRES shareholders to consider and vote upon the removal and replacement of five directors of the IRES board of directors (the “Board“) and the issuance of a shareholder direction that IRES consider, advance, and implement strategic alternatives to preserve and enhance overall shareholder value.

Vision’s requisition is made pursuant to Section 178 of the Irish Companies Act 2014, as that section applies to IRES by virtue of Section 1101 and is further to Vision’s press releases and open letters to IRES shareholders dated April 12th, 2023 and April 24th, 2023 (collectively the “Vision Letters“). Links to the Vision Letters can be found at the end of this press release.

Vision’s views are unchanged from the Vision Letters and Vision’s reasons for the requisition include its dissatisfaction with the overall management of IRES under the stewardship of the current Board and executive management team (the “Management“). Vision also highlights IRES’ continued poor share price performance, persistent discount relative to the market value of its assets, bloated cost structure, mismanagement of its balance sheet leading to the destruction of shareholder value, the inefficiency and limitations of the REIT structure in Ireland, notably poor trading liquidity, and the inability to effectively raise meaningful equity capital in a value-accretive manner. These challenges are hindering IRES’ ability to contribute to much-needed supply in a significantly undersupplied Irish housing market.

Furthermore, it is clearly evident that IRES’ ineffectiveness as a publicly traded platform has led to a widening valuation gap between private and public market values. To mitigate this gap and prevent further value destruction as a publicly traded entity, shareholders will be asked at the EGM to pass a special resolution that requires IRES to proceed with a strategy that effectively results in either the privatisation of IRES or the sale of its assets either en bloc or over the course of two years. Vision believes that IRES’ continuation in its current structure is largely a result of the collective efforts of an entrenched Board and Management to enrich themselves at the expense of both IRES shareholders and the critically undersupplied Irish housing market. 

Vision has requisitioned the EGM at this time due to the impending retirement of Margaret Sweeney, current CEO and Director, as announced by IRES on October 31st, 2023, which makes the matters to be considered by the shareholders urgent. Vision has significant concerns regarding the prospect of IRES hiring any new senior executive management team members before shareholders have the opportunity to consider and vote on the matters outlined in this communication. Such action could result in unwarranted financial burdens and strategic mismanagement for IRES, necessitating additional resources and expenses to rectify.

It is for these reasons that Vision has requisitioned an EGM with the resolutions summarized below:

1. Nominating five new directors to replace five existing directors. 

Vision strongly believes that the requisitioned Board changes, as detailed below, are critical to ensuring strong shareholder alignment and facilitating the successful implementation of a strategic review process as outlined in our prior communications and detailed herein.

In its resolutions, Vision has put forth the replacement of five incumbent directors, including Declan Moylan – the current Chair of the Board of Directors who has planned to leave the Board due to the conclusion of his extended 9-year tenure, Margaret Sweeney – the retiring Chief Executive Officer who will be leaving the Board, Brian Fagan – the current Chief Financial Officer, as well as Joan Garahy and Tom Kavanagh – two other directors serving on the Remuneration Committee. These changes align with the concerns Vision has raised in the Vision Letters as well as several concerns raised in the EGM requisition letter (the “Requisition Letter“) sent to IRES.

The five new directors put forth for nomination are listed below. We expect that, if appointed, the new Chair of the Board would be chosen from among these nominees, thereby aligning with shareholders’ mandate for change. Furthermore, we would hope this new Board, along with its advisors, will pursue a process to seek an internal or external candidate on either an interim or full-time basis to replace the retiring CEO, and such a candidate would be aligned with the directives of the refreshed Board. All of the nominees recommended would, on appointment, be independent for the purposes of the UK Corporate Governance Code as applied by IRES.

Mark Barr

Mr. Barr is an independent director and chairman of a number of regulated property funds. He is the current chairman of the Commissioners of Irish Lights, the General Lighthouse Authority for the Island of Ireland and its adjacent seas. He also chairs the Remuneration Committee and is a former member of the Audit and Risk Committee of that organisation. He served as the Chair of the Joint Strategic Board of the General Lighthouse Authorities of the UK and Ireland in 2021 and 2022. He is also a solicitor (non practicing) and retired partner of the Dublin law firm, Arthur Cox. He was head of the Arthur Cox Commercial Real Estate Practice from 2006 to 2016 and a member of the Management Committee (Executive Board) of the firm from 2002 to 2016. His field of expertise (where he practiced for over 30 years) is commercial real estate, including the purchase, sale, leasing, financing and development of commercial real estate on behalf of institutional and private equity investors and/or owner-occupiers. He is a former member of the Conveyancing Committee of the Law Society of Ireland and a former convenor of the Conveyancing Committee task force on commercial leases. He is a member of the Development Council of the Sutherland School of Law at UCD.

Richard Nesbitt

Richard Nesbitt is based in London, United Kingdom where he is working with the London School of Economics on the creation of a new research institute called The Inclusion Initiative at LSE dedicated to improving diversity and inclusion within industry.

Most recently, Mr. Nesbitt was President and CEO of the Global Risk Institute and is currently an Adjunct Professor at the Rotman School of Management at the University of Toronto and a chair of the advisory board of the Mind Brain Behavior Hive at the University of Toronto.

Previously, Mr. Nesbitt served a dual role as Chairman and CEO of CIBC World Markets Inc. as well as Chief Operating Officer of CIBC Bank. Prior to that, Mr. Nesbitt was the CEO of the TMX Group, the operator of all major Canadian trading exchanges, including the Toronto Stock Exchange, Montreal Exchange and the Canadian Derivatives Clearing Corporation. Between 1997 and 2000, he served as President and CEO of HSBC Securities.

The outstanding contribution that Mr. Nesbitt has devoted to several community-based and charitable organizations has been recognized by the receipt of prestigious awards and recognitions. This involvement includes his current and previous roles as Chair of the Finance Committee for the 2015 Pan Am/Para Pan Am Games; Board member of the Hospital for Sick Children Foundation; North American Advisory Board Member of the London School of Economics; Chair of the Financial Services Advisory Board at the Rotman School of Management; and Advisory Board Member of the Women in Capital Markets. In recognition of his community and professional dedication and accomplishments, in 2012 Mr. Nesbitt was a recipient of a Queen Elizabeth II Diamond Jubilee Medal as well as an Arbor Award from the University of Toronto.

Colm Lauder

Colm Lauder was Head of Real Estate Equity Research at Goodbody between 2016 and 2023 and now leads Lingard Capital Advisers, a boutique real estate strategic advisory business. He established and ran the real estate sector at Goodbody, leading coverage of listed property companies and REITs, providing strategic analysis and insight to international institutional investors and corporates. Goodbody real estate was quickly established as one of the leading IB teams in the UK sector, and dominant in Ireland, under Mr. Lauder’s leadership, advising on key investor decisions, strategy, and fundraising.

He is a graduate of Real Estate Finance (MPhil) from Cambridge University and Land Economy (BSc) from Dublin Institute of Technology. Prior to joining Goodbody, Mr. Lauder spent six years with MSCI (formerly known as IPD) where he led the real estate market consultancy business for the UK and Ireland, covering investment analytics, risk, performance measurement and research.

Mr. Lauder is a respected commentator in business and financial media on matters of property and housing policy and capital markets. He was also a member of the Irish REITs Forum, which was the driving force behind the introduction of REIT legislation in the Irish market in 2013.

Amy Freedman

Amy Freedman is an Advisor to Ewing Morris & Co., a Canadian based asset manager, on Engagement Fund Investing.  Additionally, she is an Advisor to Longacre Square Partners, a communications and special situations advisory firm with offices in New York, West Palm Beach and Dallas.  Ms. Freedman currently serves as a director of American Hotel Income Properties (TSX: HOT.UN), Canaccord Genuity Group (TSX: CF) and Mandalay Resources Corporation (TSX: MND).  She chairs the compensation committees at both American Hotel Income Properties and Mandalay Resources.

Ms. Freedman was previously CEO of Kingsdale Advisors, a leading shareholder services and advisory firm specializing in strategic and defensive advisory, governance advisory, proxy and voting analytics and investor communications. During her tenure at Kingsdale, Ms. Freedman personally counselled boards of directors on best practices in corporate governance including matters pertaining to general defense advisory services to navigate threats of hostile takeovers and shareholder activism.  She also advised various shareholder groups on proxy fight strategies for shareholder value enhancement.

Prior to Kingsdale, Ms. Freedman spent over 15 years in capital markets as an investment banker with global firms including Stifel and Morgan Stanley in both Toronto and New York.

Ms. Freedman holds an MBA and JD from the University of Toronto.

Sharon Stern

Sharon Stern is an accomplished entrepreneur and real estate investor. She is the President of Eastmore Management and Metro Investments, two organizations focused on value creation through the acquisition, development and management of multi-residential and commercial properties. Ms. Stern was previously a Board member at Cedar Realty Trust (NYSE: CDR), where she oversaw the strategic alternatives process that resulted in the successful sale and merger of over $1.2 billion of assets, representing a premium of over 70% to shareholders. Prior to founding Eastmore, Ms. Stern worked in Strategy and Corporate Development for the Business Development Bank of Canada.

Ms. Stern serves on the Faculty Advisory Board of McGill University’s Desautels Faculty of Management. She serves on the Board of Desautels Capital Management, is a judge and mentor at McGill’s Dobson Centre for Entrepreneurship and serves on the board of ProMontreal Entrepreneurs. In addition, she is an active angel investor in startup organizations. Ms. Stern earned a Bachelor’s Degree from McGill University in Economics and World Religions and a Master’s Degree from Brown University in Economic Policy.

2. Issuing a shareholder direction that IRES consider, advance, and implement strategic alternatives to preserve and enhance overall shareholder value.

Vision has put forth a resolution to require IRES to consider a comprehensive strategic review to assess options including but not limited to (i) a sale of IRES or its assets, or (ii) a process to sell IRES or IRES’ assets in an organised manner over the next 24 months with a view to IRES ceasing to be a publicly traded real estate investment trust and a technical resolution, amending IRES’ constitution, to ensure that direction is actioned by IRES. 

To view the complete Requisition Letter that Vision has delivered to the Board along with the Vision Letters, please click on the provided link here.

Vision has retained the services of shareholder-advisory firm Morrow Sodali. While we are not soliciting proxies for the EGM, we encourage any IRES shareholder who shares our 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 protected] for further assistance.

Arthur Cox LLP and Goodmans LLP are advising Vision.

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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