THE BOARD of the Irongate Group (IAP) has said it did not want the directors of its 19.11 percent shareholder 360 Capital Group to be represented on the board of the Australia Stock Exchange- and JSE-listed property group.
“The board of IAP has recommended security holders vote against the election of two 360 Capital Group executives to the board at the upcoming annual general meeting on August 31,” a statement said on Friday.
Australia-based 360 Capital Group, including its associated entities, hold between them 19.11 percent of the shares issued in IAP. Its two nominees, Tony Pitt and James Storey, are also executives of 360 Capital Group.
360 Capital Group could not be reached for comment on Friday.
Irongate chairperson Richard Longes said: “The board is particularly concerned that there should be no corporate action without all Irongate securityholders participating in a premium for change of control.”
“The board is concerned having regard to a number of previous situations in which 360 Capital Group, or entities it manages, have accumulated up to 19.9 percent security holdings in listed entities and then launched or agitated for major strategic corporate action,” the statement said.
“The board is concerned that through achieving board representation, amongst other things, 360 Capital Group could seek to gain effective control of IAP below its fundamental value and could also inhibit the potential for control transactions by 360 Capital Group or other interested parties at fair value.
“The board sees 360 Capital Group as a potential competitor of IAP.”
The board said it needed to ensure its independence from the sectional interest of any one particular shareholder, because a key element of IAP’s growth was to attract and manage third-party capital.
“Irongate has performed strongly since its internalisation. It has a high-performing management team and has a proven strategy to build on its history of delivering attractive returns for all securityholders.”
IAP had delivered to securityholders who invested in its JSE initial public offering (IPO) in October 2013 a total return of 146.9 percent, outperforming the JSE SA Listed Property Total Return Index’s 4 percent over the same period.
IAP had delivered to securityholders who invested in its Australia Stock Exchange IPO in May 2019 a total return of 25.3 percent, outperforming the ASX300 A-Reit Accumulation Index’s 7.8 percent over the same period.
Assets under management had grown by 41.3 percent on an annualised basis since listing on the JSE to A$1.82 billion (about R19.52bn), the statement said.
IAP had diversified since listing on the JSE by growing its balance sheet portfolio from eight to 35 properties, and had delivered regular and growing distributions that had met or exceeded guidance.
IAP’s shares closed 1.28 percent higher at R15.80 on the JSE on Friday.
BUSINESS REPORT ONLINE