InnVest Real Estate Investment Trust owns hotels with brands that include Holiday Inn.Kevin Van Paassen/The Globe and Mail
If the first meeting between InnVest REIT's incumbent trustees and the activist who wants to turf them is any indication, the odds of a friendly outcome are slim.
A representative of the activist, Orange Capital, said that there was "nothing of substance" presented by InnVest's trustees, while the head of the special committee of InnVest trustees called Orange's claims "empty rhetoric."
Orange has a plan that it says will drive up InnVest's stock, which was a laggard until recently. Part of that plan involves tossing out most of the incumbent board of trustees, and then revamping a management agreement that sees InnVest pay millions a year in fees to a closely related company.
So far, Orange's plan has received public backing from two large, institutional shareholders. With Orange's ownership of just over 10 per cent, owners of more than a quarter of InnVest's units are on public record supporting a change.
Orange said that at a meeting with two trustees, it outlined its "serious concerns" with InnVest's performance, trustee independence and the management contract. Orange's characterization of the meeting was that nothing came of it.
Laurence Geller, the head of InnVest's special committee, said that Orange should not have been surprised by the discussion.
"Orange's latest press release is empty rhetoric," he said in response. "They knew the purpose of the meeting was for us to hear their concerns and better understand their ideas as we continue to do with other unitholders. The Committee continues to do its work and finds Orange's pressure tactics both transparent and counter-productive."
Orange wants a shareholder meeting in short order so that it can get a vote on its plan, clearly believing that the public support it has garnered is the precursor to a win.