Boohoo board urges shareholders to reject Frasers' proposals

Investing.com -- Boohoo (LON:BOOH ) Group Plc's board of directors on Tuesday urged shareholders to reject the proposals made by Frasers Group, which includes the appointment of two individuals, Mike Ashley and Mike Lennon, as directors. 

The appeal is rooted in concerns about conflicts of interest and the disruptive potential of Frasers' influence on the company.

As per a stock exchange filing, Boohoo's board asserts that Frasers' actions are motivated by commercial self-interest rather than the broader benefit of Boohoo’s shareholders. 

The board mentioned past examples, such as Frasers’ involvement with Studio Retail Group, which ultimately went into administration before being acquired by Frasers. 

This case was cited as an example of Frasers leveraging its minority stake to exert significant control.

The Boohoo board has expressed concerns about the lack of governance commitments from Frasers. 

These include requests for assurances that any transactions between Boohoo and Frasers would be conducted at arm's length and that Frasers would refrain from making unsolicited bids for the company or its assets. All these requests were reportedly ignored or declined.

The board also emphasized that shareholders deserve protection from potential conflicts of interest that arise when a competitor seeks representation on the board without a clear intent to acquire the company. 

They pointed out that the proposed "protocols" from Frasers are inadequate, as they do not provide robust safeguards beyond basic legal requirements.

As part of its response, Boohoo has taken steps, including appointing Dan Finley as CEO, launching a business review, and securing equity capital to strengthen its financial position. 

These measures aim to focus on the company’s long-term growth and shareholder value maximization.

In its appeal, the board reiterated its recommendation for shareholders to vote against the resolutions proposed by Frasers at the upcoming general meeting. 

Source: Investing.com