Boohoo has written to shareholders urging them to consider the “true motivation” behind Frasers’ behaviour as they prepare to vote for Mike Ashley’s resolutions at a general meeting tomorrow.
The fast-fashion retailer said in a letter recommending shareholders should vote against Frasers’ proposal to appoint Ashley and restructuring specialist Mike Lennon to its board, accusing the group of “acting only in its own commercial self-interest and not in the interests of other shareholders”.
Boohoo said its board rejects the “strong-arm tactics used to pursue Frasers’ demands to date” and it did not accept Frasers’ proposal that Ashley or Lennon were suitable independent candidates for appointment to the board.
The letter said: “This is not the first time Frasers has acted in this way: shareholders are again reminded of the precedent situation at Studio Retail Group where Frasers used its shareholding of just under 30% to exert significant pressure on the existing management team. This included attempts by Mike Ashley to be appointed as chairman of the board and a separate shareholder requisition with the objective of installing Benjamin Gardener to the board. The business of Studio Retail Group was then put into administration.
“Frasers ultimately succeeded in acquiring the business out of administration for £1 and settled the businesses’ remaining secured liabilities for approximately 50% of their face value. Studio Retail’s other shareholders are likely to lose the entire value of their investments.”
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