boohoo Group PLC on Tuesday again asked its shareholders to vote against resolutions at its upcoming general meeting, as the firm’s boardroom struggle continues.
In a letter to shareholders, boohoo argued that demands by Frasers Group PLC for Frasers founder Mike Ashley and insolvency expert Mike Lennon to be appointed as boohoo directors form part of an ongoing campaign aimed at destabilising and disrupting the fast fashion retailer.
boohoo pointed to the recommendation from proxy advisor Institutional Shareholder Services Inc that investors oppose Frasers’ moves for board representation at the general meeting on December 20, with boohoo adding that it believes Frasers is acting in its ‘own commercial self-interest’.
boohoo highlighted that its requests for corporate governance commitments from the Sports Direct-owner, such as a statement that it has no intention to make an offer for boohoo, have been ignored.
boohoo listed several other governance-related requests that it said have also been ignored by its largest shareholder, adding that shareholders are ‘entitled to expect these commitments from Frasers, particularly in the light of Frasers’ prior behaviour.’
Frasers has a 27% stake in boohoo. It also has a 24% voting rights stake boohoo rival Asos PLC.
Historically similar actions by Frasers were cited by boohoo in justifying its recommendation to shareholders, with boohoo drawing attention to the ‘significant pressure’ that Frasers exerted on Studio Retail Group PLC’s management team, including attempts to install Ashley as chair, ultimately leading to Frasers acquiring the firm out of administration for £1 in 2022.
In a letter to boohoo shareholders on Sunday, Ashley said the online fashion retailer is a ‘catastrophic mess’ and took aim at a near 90% share price slide over the past five years. He said that he believes boohoo ‘is in desperate need’ of his guidance and called on the AIM listing to not turn to a ‘fire sale’ of its assets.
On Monday, in response to the ISS recommendation, a spokesperson for Frasers said: Ashley ‘has been very clear he would not want Debenhams sold or any fire sale of assets and has put on record his commitment to transparency and shareholder consultation.’
boohoo owns the online assets of failed department store chain Debenhams. Last month, it promoted the boss of that online operation, Dan Finley, be its new CEO, replacing John Lyttle.
Shares in boohoo were down 1.6% at 34.68 pence in London on Tuesday, while Frasers was up 0.4% at 634.50p. Frasers has a market capitalisation of £2.86 billion, compared to £484.1 million for boohoo.
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