Boohoo Group has once again called on shareholders to reject Mike Ashley’s proposed board appointments ahead of its general meeting on 20 December.
In a statement released this morning (December 12), Boohoo revealed that Institutional Shareholder Services (ISS), an independent proxy adviser, has recommended shareholders vote against the resolutions that would see Ashley appointed as CEO and Mike Lennon as a board member.
ISS criticised the Sports Direct owner’s involvement, described Ashley’s view of Boohoo’s performance as “superficial” and highlighted potential conflicts of interest surrounding the candidates.
It also noted that Frasers had not presented specific plans for change, which contributed to the recommendation to vote against the resolutions.
The online fashion giant’s current board, which has been working on a business review under the leadership of new CEO Dan Finley, said that it has a solid plan in place to drive value for shareholders. The group previously accused Mike Ashley’s company of using its stake in Boohoo and other retailers to promote its own “commercial self-interest”.
Boohoo’s opposition to Ashley’s proposed changes to its executive structure follow an open letter in which Ashley accused Boohoo’s bosses of “obliterating shareholder value and jeopardising the company’s future.”
In this morning’s statement, Boohoo chairman 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 CEO and a successful fundraising.”
CEO Dan 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.”
In Boohoo’s latest half-year results, revenue fell 15% while adjusted operating profit fell 10.5% and net debt increased by over £100m. Frasers’ bid to take control could be undermined by its own sliding sales, however. Last week it cut its profit outlook for the year to £550m-£600m after a 33% drop in pre-tax profit to £207.2m and an 8% fall in sales in the first half.
