Boohoo's board has extended an offer to Frasers for a board seat, but with the stipulation that neither Mike Ashley nor Mike Lennon are the proposed candidates.
In response to Frasers' open letter, Boohoo's board made it "clear to Frasers" that they would not endorse the appointment of either Mike Ashley or restructuring expert Mike Lennon under any circumstances, as reported by .
However, the fast-fashion firm stated its willingness to provide Frasers with a single board seat "if it puts forward an appropriate candidate for the role of non-executive director."
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Frasers Group argued in an open letter on Thursday that Boohoo's resistance to Mike Ashley and Mike Lennon joining its board essentially "boils down" to apprehensions that it would "dilute [executive vice chair Mahmud Kamani] influence". Two prominent proxy advisers, Glass Lewis and Institutional Shareholder Services (ISS), have supported Boohoo's concerns about potential conflicts of interest should Ashley and Lennon be appointed.
Frasers, which owns a 28% stake in Manchester-based Boohoo and also holds a stake in rival online retailer Asos, was accused by Boohoo's board of a "selective approach" to shareholder protection. In a market statement this morning, Boohoo clarified that "when it comes to protecting minority shareholders, Frasers will decide which commitments it wishes to give and on what terms".
Boohoo's board has made it clear that "this selective approach is consistent" with the sentiments expressed in Frasers' letter to shareholders from late November. The board emphasised, "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," In a firm stance against the proposed appointments, Boohoo reiterated its call for shareholders to vote against the plan to bring Ashley and Lennon onto its board.
Earlier on Monday, Ashley had levelled accusations of "gross mismanagement" at Boohoo’s board, criticising them for lacking "no clear strategy" to reverse the company's fortunes, which have seen its share price plummet by 90% over the past five years.
In response to the latest developments, Tim Morris, Chair of boohoo Group, stated, "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."
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He further highlighted Frasers' refusal to agree to several critical protections the board would require from an appropriate nominee.
Morris concluded by stressing the importance of addressing these issues for the protection of all shareholders, asserting, "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 on this matter is scheduled for 20 December at the Manchester office of law firm Addleshaw Goddard.