REG - Lakestreet Capital Palace Capital PLC - LAKESTREET DEMANDS CHANGE AT PALACE CAPITAL

Palace CapitalAnnouncement

Mon 07:00

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RNS Number : 6209N  Lakestreet Capital Partners AG  05 January 2026

LAKESTREET CAPITAL PARTNERS DEMANDS CHANGE TO BENEFIT ALL SHAREHOLDERS OF
PALACE CAPITAL PLC, THE FTSE REIT

Lakestreet Capital Partners AG ("Lakestreet"), the largest shareholder in
Palace Capital Plc ("Palace Capital") with a 22.53% total shareholding* has
this weekend requisitioned a general meeting of Palace Capital to remove its
Chairman, Steven Owen and to appoint its founders as directors.

Lakestreet is deeply troubled by the excessive amount of remuneration that
Steven Owen continues to extract for himself and the value destruction that
shareholders suffer as a result.

Lakestreet takes particular concern with the following:

·   The current cost of the two-person Board of Directors is equivalent to
ca. 22.75% of the net property income of the remaining two properties in
Newcastle and Northampton 1  (#_ftn1) . This ratio is wholly unacceptable and
demonstrates the urgency of our intervention.

·    For the past four years, Steven Owen as Chairman of Palace Capital
has received ca. £220,000 per annum, an amount Lakestreet deems excessive,
especially when compared to Palace Capital's previous five-person board of
directors having received £195,000 in total.

·    Steven Owen's remuneration is 4x the amount received by the previous
Chairman of Palace Capital.

·    Steven Owen's personal remuneration of approximately £220,000 per
annum appears even more egregious considering he enjoyed the support of six
executives up until 1 July 2025 and still enjoys the support of three
executives as of today.

·    Steven Owen is on track to receive up to £720,000 this financial
year after having generously reallocated further units of the Short Term
Incentive Plan (STIP) from "good leavers" to himself.

·    Steven Owen's remuneration this year will be 3x the previous year's
amount.

·    Steven Owen has extracted a notice period of 12 months for his
service contract, setting him up for another guaranteed £220,000 after the
strategy of realising assets and returning cash to shareholders has been
completed. A notice period of 12 months in the context of a strategy that is
finite, is an outrageous benefit in our view.

·    Steven Owen does not own a single share in Palace Capital.

Lakestreet further believes that Steven Owen decided to extend the financial
year of Palace Capital from 31 March 2026 to 30 September 2026 to deliberately
delay disclosure of his remuneration, obscure its extent by creating a higher
comparable within the administrative cost line of the income statement and
delay the timing for the next AGM to lengthen his tenure, robbing shareholders
of a timely vote and entrenching himself on the Board of Directors.

Lakestreet notes that Steven Owen received significant NO and ABSTAIN votes
with regards to his re-election at the Annual General Meeting in 2025, 2024
and 2023.

As a result of the above, Lakestreet has lost faith in the Chairman of Palace
Capital.  His actions have compelled Lakestreet to remove him from the Board
of Directors and seek the appointment of Lakestreet's founders in his place.

·    Lakestreet is confident it can accelerate the sale of the remaining
assets while removing all unnecessary costs from the business to deliver
greater returns for shareholders.

·    Lakestreet will not take a fee for the work, and neither will its
proposed Directors.

·    For the avoidance of doubt, Lakestreet is not expecting to be
appointed as a manager of Palace Capital.

·    Lakestreet is fully aligned with shareholders expecting further
capital returns.

·    Lakestreet is committed to complement tender offers with share
buybacks on the market (as these can be executed at a substantial discount to
NAV per share) to protect Palace Capital's NAV per share.

·    Lakestreet believes that shareholders will be able to achieve
additional returns following the sale of Palace Capital's assets and the
return of proceeds to shareholders by realising the value of Palace Capital
itself as a shell company.

With a total investment exceeding £9 million*, Lakestreet and its founders
are fully aligned with shareholders in Palace Capital to deliver those
incremental returns.

Lastly, Lakestreet would consider rescinding the requisition if the following
conditions are met:

1.   Steven Owen completes the strategy to realise asset sales and return
capital to shareholders for a reasonable fee of £40,000 in total
(Lakestreet's proposed directors are prepared to do it for free).

2.   Steven Owen waives his 12 month notice period.

3.   Steven Owen irrevocably undertakes to use the £720,000 he will receive
this financial year to purchase shares of Palace Capital in a personal
capacity, creating alignment between himself and shareholders.

4.   Palace Capital's financial year ends on 31 March as has been the case
for over a decade.

5.   Palace Capital holds an annual general meeting no later than June 2026.

6.   Palace Capital immediately begins complementing its tender offer
strategy with on market purchases of shares.

Lakestreet welcomes dialogue with other concerned shareholders of Palace
Capital and may be contacted at vote@abetterPALACE.com

Christian Kappelhoff-Wulff, CEO, Lakestreet, said:

"There is a striking disconnect between the interests of Steven Owen versus
the interests of shareholders in Palace Capital. Steven Owen receives
excessive remuneration while not owning a single share in Palace Capital. In
other words, Steven Owen benefits handsomely, irrespective of the outcome he
delivers to shareholders.

On the other hand, Lakestreet has a substantial investment in Palace Capital.
We will not be able to benefit financially unless the share price of Palace
Capital appreciates and / or Palace Capital delivers returns on its shares. In
other words, the only way for Lakestreet to benefit, is if all shareholders
benefit."

 

 

 

*About Lakestreet Capital Partners AG:

Lakestreet Capital Partners AG ("Lakestreet") is an investment firm based in
Switzerland co-founded by Christian Kappelhoff-Wulff and Valentin Pierburg
with a successful record of investing its own capital in public equities,
public debt and real estate since 2014.

Lakestreet has been a shareholder in Palace Capital since early 2024 and
recently increased its stake to become Palace Capital's largest shareholder.

Lakestreet directly owns 14.78% of the issued share capital of Palace Capital.
Direct family members of its founders own a further 7.75% of the issued share
capital, resulting in a 22.53% total shareholding.

The Lakestreet founders' personal look-through investment in Palace Capital
exceeds £9 million.

 

 

 1  (#_ftnref1) Following completion of the announced disposals in Halifax,
Leamington-Spa and Exeter.

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