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Ires Wins Battle To Control Its Future. What Happens Next?

Declan Moylan and Margaret Sweeney at the Ires REIT EGM.

Irish Residential Properties REIT shareholders rejected activist investor Vision Capital’s attempts to replace five board directors and undertake a strategic review aimed specifically at the sale of the company or its assets at an extraordinary general meeting on Friday.

In a market announcement, Ireland's largest private residential landlord, with 3,734 units across Dublin, confirmed that all resolutions put forward for consideration by the Canadian stakeholder had been rejected.

Instead, Ires REIT will carry out a strategic review, promised as part of its rebuttal of the Vision Capital proposals, which the company has pledged will consider all the options in a broad look at how it does its business. That will come after it releases its latest results on Friday.

Its share price dropped slightly following the result and is down around 16% year to date.

"The strategic review will be conducted expeditiously in all shareholders’ interests, without pre-conditions, by a highly experienced independent board, supported by external advisors in finance and real estate, with progress updates provided by the board to shareholders," the board said in a statement.

The board said more than 20% of shareholders voted against the board’s recommendations, adding that "the sources and levels of dissent are similar to dissent expressed on certain resolutions at the 2023 AGM."

Between 40% and 47% of those who voted supported the removal of board directors, falling just shy of the 50% benchmark to pass the resolutions. The proposal to have an adviser appointed to conduct a review of the business was backed by 40%, but that required 75% support to carry.

"The board takes seriously its responsibility to understand shareholders’ opinions and to minimise conflict and will continue to engage with all shareholders constructively and to act in all shareholders interests," the company said.

As a result, the company will carry out its own strategic review of options, including new initiatives, consolidation, mergers, a review of its REIT status, selling assets and returning value to shareholders, or even the sale of the entire company.

Unlike the previous review carried out in private by Ires in 2022 after pressure from Vision Capital, this strategic review will be conducted in full view of investors, and review Chair Hugh Scott-Barrett promised after the meeting that the board would enter the process with an open mind and said there should be a substantive update on the progress of the review ahead of the annual general meeting at the start of May.

After confirmation of the result, Vision Capital’s Jeff Olin told The Irish Times that he could not immediately confirm if Vision would take up a seat on the board offered by Ires and said he did not want to prejudge the outcome of discussions. He said the next step would be to engage in constructive discussions.