Frasers warns Boohoo not to sell assets without shareholder approval
- The row over the future of the struggling fast fashion retailer continues
Frasers has demanded Boohoo to publicly declare it will not sell assets without shareholder approval, as the high-profile feud between the pair gathers pace.
The retail giant urged the struggling fast fashion brand to stop ‘once and for all’ its ‘complete disregard for shareholder views’, claiming Boohoo had refused to privately agree to the consulting shareholders before selling parts of the company.
Frasers, which is a 27 percent shareholder in Boohoo, is at war with the group due to a sharp fall in its share price, weak profits and fierce disagreements over the future of the company.
Loggerheads: Boohoo CEO Dan Finley (left) and Frasers founder Mike Ashley
Last week, Boohoo appointed Debenhams boss Dan Finley as its new CEO, rejecting Frasers’ demands for the appointment of founder Mike Ashley.
Frasers had called on Ashley to take the helm as it lashed out at “terrible” performance and “mismanagement” that the company said has led to a more than 90 per cent collapse in Boohoo’s share price since its Covid-era peak .
But Boohoo defended the decision – unanimously approved by the board – saying Finley was “the obvious internal candidate” for the role.
Frasers wrote on Wednesday that Boohoo had ‘rushed a CEO appointment to attempt to block shareholder control over the company’s leadership’
“This must stop,” it added. ‘What are they going to try now? Desperate people do desperate things.”
Frasers said Boohoo had not “meaningfully engaged” with an October request for written confirmation “that it would not initiate any process or enter into any agreement… for the sale of Boohoo assets without first engaging with Frasers about alternative options’.
It warned: ‘Given the market headwinds and commercial difficulties currently facing boohoo, any sale of assets by the company, including any of its five core brands or the Soho office, would be conducted from a position of weakness and undoubtedly at a reduced valuation, and would therefore be completely unacceptable without prior shareholder approval.’
Frasers said Boohoo must ‘urgently and publicly confirm’ that it will ‘not divest any assets or business… without prior shareholder approval’.
It also required that Boohoo, prior to any sale, ‘publish confirmation from an independent global advisor (or) investment bank that the terms of the sale are fair and reasonable, that the sale has been conducted on arm’s length terms and that the sale is in the best conditions’. interests of Boohoo’s shareholders’.
Frasers company secretary Robert Palmer wrote: ‘The restriction on disposals without shareholder approval and the requirement for confirmation by an independent global advisor/investment bank are required to protect the interests of Boohoo, its shareholders and its stakeholders.’
Boohoo declined to comment.
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