The board of Urban Logistics REIT has urged shareholders to vote against all of the proposals made by Achilles Investment Company in its requisition request, as a war of words hots up between the two companies.
Achilles has requested the immediate replacement of chairman Nigel Rich and director Heather Hancock as well as the removal of the manager’s chief executive Richard Moffitt and the appointment of Robert Naylor and Sangita Shah as directors of the company.
Urban Logistics’ board said: “A general meeting will have the benefit of giving the Board the opportunity to put before shareholders all of the relevant information regarding the true quality and potential of the Urban Logistics business, the merits of internalisation, the measures and governance the Board has in place for maximising shareholder value, the track record of Robert Naylor and Sangita Shah and the Board’s views on the intent of Achilles as well as the basic viability of the Achilles proposals as they relate to a real estate business.
“The Board continues to make good progress in its dialogue with shareholders on internalisation and is in receipt of a number of constructive suggestions from shareholders on changes to the internalisation proposal. With the benefit of this detailed feedback, the Board will move as quickly as possible to finalise a proposal regarding internalisation which will take account of the constructive suggestions received from shareholders and can be put to shareholders in general meeting.
“The Board will provide a further update for shareholders shortly.”
Achilles response
In response, Achilles made a number of points.
On the proposed internalisation, it said: “On 7 March, the board proposed terms for internalisation. By 12 March, they claimed that ‘a significant majority of shareholders spoken to were supportive’. However, by 26 March, they had suddenly discovered ‘a number of constructive suggestions’ necessitating revisions. Achilles awaits the inevitable reworked proposal, which will undoubtedly be far less generous to the investment manager.
“The board’s belated recognition of the excessive price proposed for the buyout of the management contract only reinforces our belief that the board are too closely aligned with the investment manager.”
On the M1 Agency, Achilles added: “The board insists that its relationship with M1 is entirely appropriate, an impressive level of confidence given the substantial fees involved. They now acknowledge that Richard Moffitt agreed in September 2024 to step away from M1, ceasing any role in the business or entitlement to its profits after 30 September 2024. Yet, this crucial fact, six months on, is only now being disclosed.
“Achilles appreciates the board’s newfound commitment to transparency. Notably, Achilles only became aware of the potential disposal, which was announced after challenging one of the company’s financial advisers on the potential unacceptability of the arrangement.”
On its plans for the company, Achilles said that should the requisitioning investors succeed, the new directors will work constructively and collaborate with the remaining board members to conduct a thorough strategic review focused on enhancing shareholder value.
It said: “Such that, if a third party approaches the board with a proposal, Sangita Shah and Robert Naylor, if elected, will ensure it is presented to shareholders in a timely manner, prioritising the interests of the company’s owners over those of the investment manager.”
Robert Naylor, Lead Investment Manager of Achilles, commented: “It appears that the board is backpedalling as quickly as possible. Shareholders are clearly expressing genuine concern as to the governance of Urban Logistics, and it’s time for a fresh perspective to examine the relationship between the investment manager and the board.”
Sangita Shah commented: “I would be honoured if the shareholders elect me to the board of Urban Logistics. The government has made it clear that managers must demonstrate fair value for investors, and I will work diligently to ensure that this is the case if I am elected.”
