Frasers Group has issued yet another open letter to Boohoo, insisting that shareholders must approve any asset sales by the group and that independent advisers should be appointed to guarantee fair terms. The company stated, “Desperate people do desperate things.”
Under the control of Mike Ashley, who holds a 27% stake in Boohoo, Frasers accused the retailer of showing an “utter disregard for shareholder views,” asserting that “Boohoo and its shareholders deserve better.”
The letter stated: “The directors have driven Boohoo into a dire refinancing situation while refusing to engage appropriately with Frasers. They’ve hastily appointed a CEO to stifle shareholder input. This must come to an end. What will their next desperate move be? Desperate people do desperate things.”
Additionally, Frasers has launched a dedicated website—www.boohoodeservesbetter.com—for Boohoo’s shareholders, aimed at providing comprehensive information on “Frasers’ solution to Boohoo’s leadership crisis.”
Last week, the Mike Ashley-led organization communicated with Boohoo’s board, voicing its “grave concerns” regarding potential asset sales after the fashion group initiated a strategic review last month to “unlock and maximize shareholder value.”
This strategic review is speculated to involve dismantling the group, which manages brands such as Debenhams and Karen Millen, in addition to its youth-focused divisions of Boohoo, BoohooMan, and PrettyLittleThing.
Frasers has requested to be consulted on “alternative options” prior to any asset disposals, to guarantee that “all avenues for securing optimal value for shareholders are thoroughly assessed and considered.”
Nonetheless, the owner of Sports Direct stated that the board has “refused to engage meaningfully” with it, prompting Frasers to air its demands publicly.
It expressed concern: “In light of the market challenges and commercial obstacles currently facing Boohoo, any asset disposals, including those involving any of its five key brands or the Soho office, would be conducted from a position of vulnerability, resulting in an inevitably discounted valuation. Thus, such actions would be entirely unacceptable without prior shareholder
approval.”
Last week, Boohoo rejected Mike Ashley’s request to become its new CEO and appointed Dan Finley, the head of Debenhams, in a move that the Frasers chief labeled as “desperate.”
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