Boohoo has called on its shareholders to reject Mike Ashley's bid for leadership of the beleaguered fast fashion group, stating that Ashley is "not suitable" and faces conflicts of interest due to his role at Frasers.
The two companies have been publicly at odds over the future direction of the company for the past month, as reported by .
Frasers has levelled accusations of "long-term mismanagement" leading to "value destruction" at the retailer, and criticised its £222mn refinancing. Boohoo, in turn, has labelled Frasers' assessment of the business as "inaccurate and unfair".
READ MORE: {}
Ashley's attempt to secure the CEO position was thwarted last week when Boohoo appointed Dan Finley to the role. However, investors will have the opportunity to vote on whether to appoint Ashley, along with restructuring specialist Mike Lennon, to the board on December 20.
In a circular to investors, Boohoo implored its shareholders to vote against the resolution.
"The board has a credible plan to unlock and maximise value for the benefit of all shareholders through its Business Review and in Dan Finley has the right CEO to lead the business," it stated.
It contended that Ashley and Frasers have "attempted to exert influence over the Board's refinancing, Business Review and appointments to the board for the good of themselves alone, and are acting in their own self-interest."
Boohoo remarked, "Frasers has prior history of this sort of corporate behaviour shareholders should ask themselves what Frasers' true intentions are, and why is it apparently seeking to disrupt the Business Review. Is it purely to maximise value, or is there an ulterior motive to acquire boohoo's assets for below market value? ".
Most Read
In response to the tensions with Frasers Group, Dan Finley, CEO of boohoo, commented: "I reiterate the commitment I made on my appointment to working to unlock significant value for all shareholders. We are taking decisive steps to deliver on this promise and will continue to do so during the coming months as I begin replicating the success I achieved at Debenhams."
"We have outlined in the circular posted today why the proposals from Frasers are not in the best interests of all shareholders, and we look forward to receiving shareholder support and maximising value for all shareholders as we move forward."
Boohoo announces £40m fundraise
In a separate update, Boohoo publicised a successful fundraise totalling £39.3m, stating this morning that it had been "significantly oversubscribed".
The company also unveiled its half-year results.
In terms of performance, revenue saw a descent by 15 per cent in the first half to £729.1m, from the previous £619.8m, while the adjusted loss before tax climbed to £27.4m, up from £9.1m last year.
Adjusted earnings before interest, tax, depreciation, and amortisation (EBITDA) slipped down 10.5 per cent to £20.8m from the earlier £31.3m.
There was an uptick in net debt, which grew from £35m to £143.1m. However, Boohoo stated it managed to slash operating costs by £128m year-on-year.
The firm has projected an increase in returns and a stronger adjusted EBITDA performance for the second half of the year.