A significant development has emerged at Manchester-based private rented sector housing group, PRS REIT, where shareholders have initiated a bid to remove two independent non-executive directors, including the Chairman.
The aim of this move is believed to be the instigation of a strategic review of the £500 million turnover business, potentially leading to its sale. This morning, the company disclosed to the stock exchange that it has received a letter from shareholders Harwood Capital Management, Waverton Investment Management, CCLA Investment Management, Alder Investment Management, and CG Asset Management, demanding a general meeting. Collectively, these shareholders hold 94,025,149 ordinary shares, which represent approximately 17.3% of PRS REIT’s issued share capital.
Additionally, the company has indicated that Ruffer and Asset Value Investors, who collectively hold around 1.6% of the issued share capital, have committed to voting in favour of the resolutions proposed by the requisitioning investors. The announcement from PRS REIT specified that the letter requests shareholders to consider and vote on ordinary resolutions to remove the Chairman, Stephen Paul Smith, and fellow independent non-executive director, David Steffan Francis. The letter also proposes the appointment of Robert Graham Naylor as non-executive Chairman and Christopher Harwood Bernard Mills of Harwood Capital Management as a director. Harwood Capital Management itself holds 1.1% of the share capital of PRS REIT.
The company is currently seeking advice regarding the validity of the requisition letter and has stated that further announcements will follow in due course. Despite this significant announcement, the share price of PRS REIT remained largely unaffected this morning. It started at 92p per share, briefly rose to 96.69p, and was recorded at 96.12p per share as of 11:20 am.
Stephen Smith, the independent non-executive Chairman facing removal, possesses over 40 years of experience in the real estate industry. His career includes roles such as Chief Investment Officer for the British Land Company and Global Head of Asset Management and Transactions at AXA Real Estate Investment Managers, overseeing portfolios valued at more than €40 billion. Smith also has experience as a non-executive Chairman and Director at various other property finance and real estate entities.
David Steffan Francis, who is also facing removal, has an equally extensive career in the real estate sector, including his tenure as a director at M&G Real Estate, where he managed the £6 billion ‘Long Income’ business. Additionally, he has held positions at Prudential Property Investment Managers and served as an independent adviser to the British Steel Pension Trustees. Francis is a Fellow of the Royal Institution of Chartered Surveyors and a member of the Investment Property Forum.
The shareholders’ bid to oust the Chairman and a key director reflects a critical juncture for PRS REIT. The forthcoming actions and potential strategic review could significantly alter the direction and ownership of the company.