Boohoo Group urges shareholders to refute Mike Ashley’s board nominations, intensifying their ongoing corporate struggle.
- An independent adviser, ISS, supports Boohoo’s call against Ashley’s proposed board appointments citing conflicts of interest.
- Ashley criticised Boohoo’s executives, whereas Boohoo claims Ashley’s firm pursues self-interest.
- The existing board has activated a business review under CEO Dan Finley to enhance shareholder value.
- Frasers Group’s financial decline seems to undermine their position amidst the board dispute.
Boohoo Group has once again made an appeal to its shareholders to reject the appointment of Mike Ashley and Mike Lennon to its board ahead of the general meeting scheduled for 20 December. Institutional Shareholder Services (ISS), a respected proxy adviser, has backed Boohoo’s stance, advising shareholders to vote against these resolutions. ISS’s concerns revolve around potential conflicts of interest due to Ashley’s connections and a superficial understanding of Boohoo’s performance.
The advisory firm further criticised the absence of any clear plan presented by Frasers Group to warrant such significant board changes. Boohoo’s current board, under the leadership of new CEO Dan Finley, has been engaged in a comprehensive business review aimed at increasing shareholder value. The board had previously accused Ashley’s company of leveraging its stake for commercial self-interest. This morning, Boohoo’s chairman, Tim Morris, expressed gratitude for ISS’s support, aligning with their recommendation to oppose Frasers Group’s proposals.
In an open letter, Mike Ashley has voiced strong disapproval of Boohoo’s strategies, accusing its leaders of diminishing shareholder value and risking the company’s future. However, Boohoo remains firm in its belief that their strategy, led by CEO Dan Finley, is designed to unlock and maximise value for investors. Finley commented on what he perceives as the undervaluation of the group, maintaining there is significant potential for the business to once again be an industry leader.
The financial backdrop of this boardroom skirmish reveals Boohoo’s revenue dropped by 15% alongside a 10.5% decrease in adjusted operating profit, coupled with a £100 million increase in net debt. On the other hand, Frasers is also grappling with financial setbacks, having recently revised its profit outlook for the year downwards after experiencing a 33% drop in pre-tax profits and an 8% sales decline in the first half of the year. These financial dynamics add complexity to the ongoing dispute, casting doubt on Frasers’ capacity to take control.
Boohoo’s resolute opposition to Mike Ashley’s board proposals underscores the intense battle for control amid challenging financial landscapes for both organisations.
