Boohoo Group has addressed Frasers Group’s proposal to appoint Mike Ashley as its new CEO, emphasizing the importance of governance and consideration.
- Frasers Group, Boohoo’s largest shareholder, had criticized the board’s management and engagement with significant shareholders.
- Boohoo clarified that Frasers’ proposal for Ashley was a sudden shift, as he was previously ruled out for the CEO role by Frasers itself.
- Boohoo highlighted governance and shareholder interests as paramount, questioning Frasers’ assurance in these areas.
- Boohoo disputed Frasers’ view on recent debt refinancing, defending the move as necessary and properly communicated.
Frasers Group’s recent proposal for Mike Ashley to assume the CEO role at Boohoo Group has drawn a measured response from Boohoo. Boohoo Group stressed the importance of a thorough and considered approach to CEO appointments, especially given the implications for governance and shareholder interests. This response comes after Frasers, Boohoo’s largest shareholder with a 27% stake, issued a public letter accusing Boohoo’s board of mismanagement and a lack of engagement with key shareholders.
Boohoo refuted Frasers’ claims that it had delayed or ignored requests regarding board representation. Boohoo pointed out that the proposal to appoint Ashley was unexpectedly presented at a meeting on October 18th, despite Frasers ruling him out of consideration just days prior on October 9th. This highlights a significant change in Frasers’ stance, which previously insisted that any nominee would occupy a non-executive role.
Boohoo underscored the necessity of ensuring appropriate governance for any potential appointment, particularly given Ashley’s substantial 73% stake in Frasers and Frasers’ 23.6% ownership in Asos. These positions imply potential conflicts of interest that require careful board deliberation. Boohoo mentioned its attempts to secure necessary assurances from Frasers, which have not yet been provided, signifying ongoing concerns.
The company reiterated that the search for a new CEO was already initiated before engaging with Frasers on October 18th, indicating a proactive approach to finding a suitable leader. John Lyttle will continue as CEO until this process concludes, ensuring leadership stability in the interim.
Furthermore, Boohoo addressed Frasers’ criticisms regarding its recent debt refinancing of £222 million. Frasers had claimed that the refinancing imposed undue financial strain on Boohoo, necessitating drastic actions. In response, Boohoo defended the refinancing as a strategic move, adequately backed by its existing banking partners and communicated to Frasers and its advisors, though alternative proposals were invited from Frasers, none were forthcoming.
Boohoo emphasizes a thoughtful approach in managing governance and CEO appointments amidst shareholder critiques.
