Boohoo floats board seat to Frasers – as long as it’s not for Ashley or Lennon
Boohoo’s board has floated an olive branch to Frasers today with the offer of a board seat, but only if Mike Ashley or Mike Lennon are not the candidates put forward.
The board of Boohoo has hit back at Frasers’ today in response to its open letter, making it “clear to Frasers” that it will not recommend the appointment of Mike Ashley or restructuring specialist Mike Lennon to the Board in any circumstances.
However, the fast-fashion company added that it was willing to offer Frasers a single seat on its board “if it puts forward an appropriate candidate for the role of non-executive director.”
Frasers Group claimed in an open letter on Thursday that Boohoo’s opposition to Mike Ashley and Mike Lennon joining its board “boils down” to fears it would “dilute [executive vice chair Mahmud Kamani] influence”.
Two influential proxy advisers, Glass Lewis and Institutional Shareholder Services (ISS) have backed Boohoo’s concerns that the appointment of Ashley and Lennon would create a conflict of interest.
Frasers, which owns 28 per cent of Boohoo, also holds a stake in rival online retailer Asos.
The board of Boohoo also accused Frasers of a “selective approach” to protecting shareholders.
In a statement to the market this morning, Boohoo said the letter made it clear that “when it comes to protecting minority shareholders, Frasers will decide which commitments it wishes to give and on what terms”.
It stated “this selective approach is consistent” with the contents of Frasers’ letter to shareholders in late November.
The Boohoo’s board stated it “wishes to make it clear that these are issues which need to be fully addressed for the protection of all shareholders”.
“It is not for Frasers to pick and choose how it does so in order to suit its own commercial interests or wider corporate strategy in relation to boohoo and its assets,” Boohoo said.
The board again urged its shareholders in its Friday response to vote against the plan to appoint Ashley and Lennon to its board.
Back on Monday, Ashley accused Boohoo’s board of “gross mismanagement” and having “no clear strategy” to halt a decline, which has seen the share price fall 90 per cent over the last five years.
Commenting on today’s response, Tim Morris, boohoo Group chair, said “the board has consistently said that due to obvious conflict points and because of their historical ties to Frasers, Mike Ashley and Mike Lennon are not appropriate candidates to join the board in any circumstances, whatever commitments are offered.”
“Notwithstanding that, Frasers continues to refuse to agree to a number of the key protections that the voard would require should an appropriate representative be nominated.”
He added that “these are key issues which need to be addressed for the protection of all Shareholders and it is not for Frasers to pick and chose which commitments it will give.”
The general meeting to vote this matter will be held on 20 December at the Manchester office of law firm Addleshaw Goddard.