City grandees launch bid to unseat Urban Logistics chair
An investment trust run by City grandees has called a shareholder vote to unseat the chair and two directors of Urban Logistics REIT.
City veterans Christopher Mills and Robert Naylor run Achilles Investment Company, and have banded together with Waverton Investment Management, TR Property Investment Trust and Harwood Capital to launch the takeover.
Naylor and Mills are best known for orchestrating the sale of Hipgnosis to Blackstone last year at a 60 per cent premium to the struggling trust’s stock price.
The duo also worked together to topple the chair of PRS REIT, while Naylor was chair of Round Hill Music Trust when it received a takeover offer.
Along with the proposals to unseat board members, Achilles is calling for Naylor to be appointed as chair of Urban Logistics and for Sanjeta Shah to be appointed as a director.
If appointed, the new board will immediately conduct a review of the trust’s investment management arrangements, adopt a discount control mechanism, and look into selling off the trust’s assets.
Last week, Achilles flagged a conflict of interest with the boss of Urban Logistics’ investment adviser, Richard Moffitt, and the fact he is also an equity partner of property advice business M1, which has received millions of pounds in fees from the trust.
“While many REITs are making welcome improvements to governance and strengthening alignment between managers and shareholders, Urban Logistics appears to be moving in the opposite direction,” TR Property fund manager Marcus Phayre-Mudge told City PM.
Winterflood analyst Emma Bird said she thought it was likely the proposals will pass, considering the duo’s experience in fighting against trust boards.
“In general, we view the proposals as positive for shareholders, particularly the examination of various management contracts, the introduction of a regular continuation vote and the potential for a liquidity event combined with a suitable rollover option,” she said.
Achilles, which launched last month after raising £54m, was set up to target struggling investment trusts.
Analysts had been expecting property trusts to be the first target of Achilles, due to the frequency of M&A activity in the sector.
“With Saba defeated on multiple campaigns and having disappeared with its tail between its legs, Achilles has filled the void and is determined to show that activists can still win in the investment trust space,” said Dan Coatsworth, investment analyst at AJ Bell.
“Combined with Saba’s recent efforts, it suggests that every board of directors in the investment trust space needs to look hard at what’s going on to ensure that everything is above-board and that they’re working in the best interests of shareholders. Otherwise, someone will come along and stir up trouble.”