Boohoo urges shareholders to vote against Mike Ashley’s Frasers Group as board change is ‘not warranted’

Boohoo Group is urging shareholders to reject the “fresh ideas” of Mike Ashley ahead of its upcoming general meeting amid his bid to secure a seat on the board.

In a statement published to the London Stock Exchange this morning, Boohoo said that the Institutional Shareholder Services (ISS) has “recommended that Boohoo shareholders vote against the resolutions” at the meeting which is taking place on December 20.

Boohoo reported that ISS said Frasers has offered a “superficial view of performance” as well as “no specific plans for change” at the business.

The statement added that both Frasers Group candidates Mike Ashley and Mike Lennon have “real conflicts of interests” and said that a board change at Boohoo is “not warranted” as a result.

This comes after the most recent open letter from Frasers Group founder Mike Ashley, addressed to Boohoo shareholders, in which he vowed to turn the business around by supporting efforts for “more cost-effective and sustainable financing” to avoid a fire sale.

Ashley called Boohoo founder Mahmud Kamani “egotistical”, said the recent appointments a “game of musical chairs” and added that Boohoo’s board have created a “catastrophic mess” through “gross mismanagement” which has driven down the share price of the business by 90% in five years.

Ashley’s bid to gain a seat on the board was opposed by Boohoo again today after it reiterated its previous “unanimous” recommendation from the Boohoo board which includes a “credible plan to unlock and maximise value” as well as confidence in new chief executive Dan Finley.

Boohoo said in a statement: “The board is not deliberately seeking confrontation with Frasers, but will at all times act in the best interests of the company and all shareholders.”

Boohoo Group chair Tim Morris said: “The board of boohoo welcomes the backing of ISS, which is in line with the recommendation we have made to reject the proposals from Frasers Group.

“We are clearly focused on doing what is right for all investors, following the launch of our business review to unlock and maximise shareholder value, the appointment of Dan Finley as our chief executive and a successful fundraising.”

Finley added: “I believe that the group is fundamentally undervalued. There is no doubt that there is enormous opportunity for the group and I am determined to get back to being a disruptive and industry leading business.

“Working with Tim, our independent non-executive chairman, overseen by our independent board, I am fully focused on creating maximum value for, and protecting the interests of, all shareholders.”