Achilles moves to oust Urban Logistics chair

(Sharecast News) - Activist investor Achilles Investment has called for a radical overhaul of Urban Logistics' board, including the removal of chair Nigel Rich, it was confirmed on Wednesday. The firm said the changes were in the interest of all investors and would ensure the real estate investment trust maximised shareholder value.

Achilles, which was founded earlier this year by City veterans Christopher Mills and Robert Naylor, holds an 8.8% stake in the business.

As well as Rich's removal, Achilles wants directors Heather Hancock and Richard Moffit to step down, with Naylor becoming chair and Sangita Shah appointed as a director.

The new board would then suspend Urban Logistics' proposed internalisation and conduct a "comprehensive review of investment management arrangements to ensure improved value for money for shareholders".

Urban Logistics announced this month that it had agreed an internalisation proposal with the principals of Logistics Asset Management, its investment manager, and urged shareholders to back the deal.

Under the terms of the deal, Moffit - who heads up LAM - would become chief executive. Fellow LAM directors Justin Upton and Jamie Waldegrave would also join the board, as chief investment officer and chief financial officer respectively.

An initial consideration of £6.8m would then be payable upon completion.

At the time, Urban Logistics argued that the deal would enhance earnings and cut operating costs by around £1.4m a year.

However, Achilles believes that while the proposal "may have merit in principle", it is not in shareholders' financial interest. It has also claimed that "nearly all the company's largest shareholders" share its concerns.

It therefore wants investors to back its resolution at an extraordinary general meeting.

Urban Logistics has yet to comment on the requisition for an EGM.

Dan Coatswoth, investment analyst at AJ Bell, said: "Achilles has wasted no time in flexing its muscles.

"It hinted a week ago that it was not happy with the goings-on at Urban Logistics. It flagged a conflict of interest with Moffit and the fact he is also an equity partner of a property related advice business that has received millions of pounds in fees from the trust.

"The EGM requisition creates new drama. Combined with [fellow activist investor] Saba Capital's recent efforts, it suggest that every board of directors in the investment trust space needs to...ensure everything is above board and that they're working in the best interests of shareholders. Otherwise someone will come along and stir up trouble."

As at noon GMT, shares in Urban Logistics were up 2% at 131.6p.