Glass Lewis Notes That Neither of the Land
& Buildings Nominees Will Be Additive or the Right Fit for
Aimco’s Board and Recommends That Stockholders Do Not Vote for Land
& Buildings’ Nominees
Apartment Investment and Management Company (NYSE: AIV) (“Aimco”
or the “Company”) today announced that Glass Lewis & Co.
(“Glass Lewis”), a leading independent proxy advisory firm, has
recommended that Aimco stockholders vote “FOR” Aimco’s three
highly qualified director nominees, Jay Paul Leupp, Michael A.
Stein and R. Dary Stone, on the WHITE proxy card in advance
of the Company’s December 16, 2022 Annual Meeting of Stockholders
(“Annual Meeting”).
In its report dated December 1, 2022, Glass Lewis stated1:
“Based on our review and analysis, having
evaluated the arguments made by L&B, Aimco's responses, and
other considerations, we do not believe there is a compelling case
to warrant board change at this time, nor do we believe L&B's
nominees would be additive to the Aimco board. We find the
Company's performance has been generally strong and its valuation
broadly in-line with peers, particularly as of late. We believe
current leadership deserves credit for the numerous actions it has
taken related to Aimco's business, operations and corporate
governance, which appear to have been the main drivers underlying
Aimco's recent share price outperformance.”
“Moreover, we don't consider either L&B
nominee to be particularly additive or the right fit for the Aimco
board. And we would have serious misgivings about the board losing
certain expertise and perspective that the incumbent directors
possess under any of the alternative voting scenarios described
above. Specifically, it appears both L&B nominees have a
similar skill set and are meant to fulfill the same purpose on the
Aimco board, which would seem to be to primarily assist with
investor communications and capital allocation.”
On Aimco’s Performance:
“In our view, Aimco's share price
outperformance and the narrowing of its NAV trading discount to
peers… have been driven primarily by the actions taken by the
current board and management team since the spin-off, as well as
Aimco's operational execution and financial results, which for the
most part appear to have given investors reason to believe in the
Company's strategy, performance and management.”
“Thus, while we acknowledge Aimco's
persistent discount to NAV, given that both developer and apartment
REIT peers have also recently traded at significant discounts to
NAV, this currently appears to be more of an industry-wide issue
than an Aimco-specific problem, in our opinion.”
“Given the timing of Aimco's valuation gap
narrowing (which we acknowledge partially overlaps with L&B's
involvement and public campaign) and the consistency with which
Aimco has recently traded with peers on a price-to-NAV basis, we do
not believe recent trading activity can be attributed solely to
investor "hope" stemming from the Dissident's campaign.”
“Still, L&B's narrative is largely
refuted, in our view, by the fact that Aimco initially set out its
strategy and objectives for investors more than a year ago, in
October 2021, and has provided key updates for investors along the
way, including in both February 2022 and June 2022, in addition to
quarterly earnings releases.”
On the Strength of Aimco’s Incumbent
Directors:
“Lastly, with respect to the incumbents who
L&B is opposing this year, we take note of Mr. Stein's
accounting, executive, and business separation experience, as well
as his role as chairman of the investment committee currently
leading the board's review of options to further enhance value, and
Mr. Stone's real estate development experience and role as chairman
of the governance committee, where he has demonstrated a
responsiveness to investor concern by enacting a number of
governance improvements. In our view, the expertise and experience
of the incumbent directors up for re-election this year remains
crucial to Aimco's progress and forward plan.”
“Based on our meeting with Mr. Leupp and
other Aimco board members, we believe he and the board are
committed to further enhancing Aimco's investor relations and
communications. And the board appears well equipped to do so, in
our view, given Mr. Leupp's experience and perspective.”
“Although L&B has called out Mr. Stone,
as chairman of Aimco's governance committee, for not pressing for
the immediate de-staggering of the board or other governance
improvements earlier, the fact that he and the board have since
shown responsiveness to investor feedback by adopting various
governance reforms (as detailed above) suggests to us that Mr.
Stone is more likely part of the solution than any ongoing problems
on the Aimco board.”
“We also find Aimco's investor relations and
capital allocation – primary complaints of the Dissident and the
areas where its nominees would presumably make their biggest
contributions - to already be in capable hands and not nearly as
lacking as L&B has alleged, significantly undercutting the
candidacies of L&B's nominees, in our view.”
On Land & Buildings’ Nominees:
“On the other hand, the first of L&B's
nominees, Ms. Applebaum, comes from a background in the steel
industry, first as an analyst and then a director, with no relevant
real estate or REIT experience. We also note she is a perennial
L&B nominee, having been nominated by the investor in three
prior instances yet never elected by shareholders or otherwise
appointed to those boards.”
“While Mr. Sullivan's experience seems much
more suited for Aimco, we consider it is also largely duplicative
by virtue of Mr. Leupp's presence on the Aimco board, who has
significant real estate and REIT experience from an investor
perspective, as well as additional, current board experience at
another public REIT. Given this would be Mr. Sullivan's first
public company directorship (which is not a disqualifying factor on
its own, in our view) and considering his perspective is largely
replicated by Mr. Leupp and the Company's ongoing advisory
relationship with Green Street, where Mr. Sullivan previously led
the advisory practice, we see a reduced need for his perspective at
this time.”
Commenting on the Glass Lewis recommendation, Aimco issued the
following statement:
We are pleased that Glass Lewis supports the
reelection of all three of Aimco’s highly qualified director
nominees.
Glass Lewis clearly recognizes that Aimco has
the right Board and the right strategy to continue enhancing value
for stockholders. Its recommendation reaffirms the Board’s
unanimous conclusion that electing Land & Buildings’ slate of
dissident director nominees would not be additive and would remove
expertise from the New Aimco Board that is critical to the
Company’s success.
We strongly urge stockholders to follow Glass
Lewis’s recommendation and vote “FOR” the Company’s three
highly qualified directors: Jay Paul Leupp, Michael A. Stein and R.
Dary Stone on the WHITE proxy card.
Aimco reminds stockholders that their vote is extremely
important, no matter how many or how few shares they own. The
Company strongly recommends that stockholders vote “FOR” the
Company’s three highly qualified directors: Jay Paul Leupp, Michael
A. Stein and R. Dary Stone.
1 Permission to use quotes neither sought nor obtained
If you have questions or require any assistance
with voting your shares, please contact the Company’s proxy
solicitor listed below:
MacKenzie Partners, Inc. 1407 Broadway,
27th Floor New York, New York 10018 Call Collect: (212) 929-5500 or
Toll-Free (800) 322-2885 Email:
proxy@mackenziepartners.com
About Aimco
Aimco is a diversified real estate company primarily focused on
value add, opportunistic, and alternative investments, targeting
the U.S. multifamily sector. Aimco’s mission is to make real estate
investments where outcomes are enhanced through its human capital
so that substantial value is created for investors, teammates, and
the communities in which we operate. Aimco is traded on the New
York Stock Exchange as AIV. For more information about Aimco,
please visit its website www.aimco.com.
Forward-Looking Statements
This document contains forward-looking statements within the
meaning of the federal securities laws. Forward-looking statements
include all statements that are not historical statements of fact
and those regarding our intent, belief, or expectations, including,
but not limited to, the statements in this document regarding
future financing plans, including the Company’s expected leverage
and capital structure; business strategies, prospects, and
projected operating and financial results (including earnings),
including facts related thereto, such as expected costs; future
share repurchases; expected investment opportunities; and our 2022
pipeline investments and projects. We caution investors not to
place undue reliance on any such forward-looking statements.
Words such as “anticipate(s),” “expect(s),” “intend(s),”
“plan(s),” “believe(s),” “plan(s),” “may,” “will,” “would,”
“could,” “should,” “seek(s),” “forecast(s),” and similar
expressions, or the negative of these terms, are intended to
identify such forward-looking statements. These statements are not
guarantees of future performance, condition or results, and involve
a number of known and unknown risks, uncertainties, assumptions and
other important factors, among others, that may affect actual
results or outcomes include, but are not limited to: (i) the risk
that the 2023 preliminary plans and goals may not be completed in a
timely manner or at all, (ii) the inability to recognize the
anticipated benefits of pipeline investments and projects, (iii)
changes in general economic conditions, including as a result of
the COVID-19 pandemic. Although we believe that the assumptions
underlying the forward-looking statements, which are based on
management’s expectations and estimates, are reasonable, we can
give no assurance that our expectations will be attained.
Risks and uncertainties that could cause actual results to
differ materially from our expectations include, but are not
limited to: the effects of the coronavirus pandemic on the
Company’s business and on the global and U.S. economies generally;
real estate and operating risks, including fluctuations in real
estate values and the general economic climate in the markets in
which we operate and competition for residents in such markets;
national and local economic conditions, including the pace of job
growth and the level of unemployment; the amount, location and
quality of competitive new housing supply; the timing and effects
of acquisitions, dispositions, redevelopments and developments;
changes in operating costs, including energy costs; negative
economic conditions in our geographies of operation; loss of key
personnel; the Company’s ability to maintain current or meet
projected occupancy, rental rate and property operating results;
the Company’s ability to meet budgeted costs and timelines, and, if
applicable, achieve budgeted rental rates related to redevelopment
and development investments; expectations regarding sales of
apartment communities and the use of proceeds thereof; insurance
risks, including the cost of insurance, and natural disasters and
severe weather such as hurricanes; financing risks, including the
availability and cost of financing; the risk that cash flows from
operations may be insufficient to meet required payments of
principal and interest; the risk that earnings may not be
sufficient to maintain compliance with debt covenants, including
financial coverage ratios; legal and regulatory risks, including
costs associated with prosecuting or defending claims and any
adverse outcomes; the terms of laws and governmental regulations
that affect us and interpretations of those laws and regulations;
possible environmental liabilities, including costs, fines or
penalties that may be incurred due to necessary remediation of
contamination of apartment communities presently or previously
owned by the Company; activities by stockholder activists,
including a proxy contest; the risk of the timing of our
stockholder value enhancement review and the risk that we will not
identify any value enhancing options or that we will not
successfully execute or achieve the potential benefits of any such
options.
In addition, the Company’s current and continuing qualification
as a real estate investment trust involves the application of
highly technical and complex provisions of the Internal Revenue
Code and depends on the Company’s ability to meet the various
requirements imposed by the Internal Revenue Code, through actual
operating results, distribution levels and diversity of stock
ownership. Readers should carefully review the Company’s financial
statements and the notes thereto, as well as the section entitled
“Risk Factors” in Item 1A of the Company’s Annual Report on Form
10-K for the year ended December 31, 2021 and in Item 1A of the
Company’s Quarterly Reports on Form 10-Q for the quarterly periods
ended March 31, 2022, June 30, 2022, and September 30, 2022, and
the other documents the Company files from time to time with the
SEC. These filings identify and address important risks and
uncertainties that could cause actual events and results to differ
materially from those contained in the forward-looking
statements.
These forward-looking statements reflect management’s judgment
as of this date, and the Company assumes no (and disclaims any)
obligation to revise or update them to reflect future events or
circumstances.
We make no representations or warranties as to the accuracy of
any projections, estimates, targets, statements or information
contained in this document. It is understood and agreed that any
such projections, estimates, targets, statements and information
are not to be viewed as facts and are subject to significant
business, financial, economic, operating, competitive and other
risks, uncertainties and contingencies many of which are beyond our
control, that no assurance can be given that any particular
financial projections or targets will be realized, that actual
results may differ from projected results and that such differences
may be material. While all financial projections, estimates and
targets are necessarily speculative, we believe that the
preparation of prospective financial information involves
increasingly higher levels of uncertainty the further out the
projection, estimate or target extends from the date of
preparation. The assumptions and estimates underlying the
projected, expected or target results are inherently uncertain and
are subject to a wide variety of significant business, economic and
competitive risks and uncertainties that could cause actual results
to differ materially from those contained in the financial
projections, estimates and targets. The inclusion of financial
projections, estimates and targets in this presentation should not
be regarded as an indication that we or our representatives,
considered or consider the financial projections, estimates and
targets to be a reliable prediction of future events.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20221201005941/en/
Matt Foster Sr. Director, Capital Markets and Investor Relations
(303) 793-4661 investor@aimco.com
MacKenzie Partners, Inc. Dan Burch (212) 929-5748
Dburch@mackenziepartners.com
Andrew Siegel / Greg Klassen / Adam Pollack Joele Frank,
Wilkinson Brimmer Katcher (212) 355-4449
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