Boohoo has today published a letter to shareholders in connection with its general meeting on 20 December, reiterating its recommendation for shareholders to vote against Mike Ashley’s bid for a seat on the retailer’s board.
The letter claims that the demands from Frasers form part of a campaign that appears to be designed to “destabilise Boohoo and disrupt its plans to unlock and maximise shareholder value”.
It also notes that Boohoo is “not deliberately seeking confrontation with Frasers” and “will at all times act in the best interests of the company and all shareholders”.
“The board has been clear that if Frasers wishes to make a considered proposal for a suitable independent candidate to be appointed to the board as a Non-Executive Director and will provide the legal and compliance commitments which the board has sought, the board would be minded to appoint a suitable Non-Executive Director at Frasers’ request,” the letter reads.
“But the board rejects in the strongest terms the strong-arm tactics used to pursue Frasers’ demands to date and does not accept Frasers’ proposal that Mike Ashley or Mike Lennon are suitable independent candidates for appointment to the board.”
It comes shortly after a prominent shareholder advisory firm also urged Boohoo investors to reject Ashley’s bid for a seat on the retailer’s board. Institutional Shareholder Services (ISS) had recommended shareholders vote against the plans later this month.
ISS states that Frasers has offered a superficial view of performance and no specific plans for change and the two Frasers candidates, Mike Ashley and Mike Lennon, have real conflicts of interest, concluding that board change at Boohoo is not warranted.
The fashion firm is embroiled in a war of words with businessman Mike Ashley’s Frasers Group, which has a 27% stake in Boohoo.
On Sunday, in an open letter to shareholders, Ashley attacked the company for having an “egotistical founder who has an unhealthy grip on the board” and said it was “in desperate need of the guidance I can provide”.
He also warned against a turnaround that sees the “fire sale of assets at knockdown prices”, including the Debenhams brand which he said should not be sold.
Ashley said his motivation for seeking to become Boohoo’s Chief Executive was to help the brand and “prevent any dishonest profiteering” off investors.
In response, Boohoo insisted that Ashley was pursuing his own commercial interests rather than that of its shareholders.
Shareholders will have the opportunity to vote on Ashley’s attempt to gain a seat on the company’s board before Christmas.
