Boohoo shareholders have decisively voted against Frasers Group’s proposed changes, ending a significant boardroom dispute.
- Frasers Group aimed to appoint Mike Ashley and Mike Lennon to Boohoo’s board while removing executive chairman Mahmud Kamani.
- A large majority of Boohoo shareholders, 63.77%, opposed Ashley’s appointment, with similar opposition to Lennon’s role.
- The vote represents a turning point in the ongoing leadership conflict amid Boohoo’s financial hurdles.
- Independent advisers advised against Frasers’ suggestions, supporting Boohoo’s current leadership.
Frasers Group, holding a 27% stake in Boohoo, faced a firm rejection as shareholders voted against its proposals during the general meeting on December 20. The group intended to place Mike Ashley as CEO and Mike Lennon as a director, alongside removing Mahmud Kamani from his position as executive chairman. This move was part of Frasers’ broader aim to restructure the beleaguered fashion retailer.
The shareholder vote delivered a substantial verdict, with 63.77% of participants dismissing the bid to appoint Mike Ashley and 63.76% opposing Mike Lennon’s addition to the board of directors. Only 36.23% and 36.24% respectively supported these appointments, reflecting significant resistance from Boohoo’s shareholder base. This voting turnout encompassed 81.10% of the company’s issued share capital, with a negligible number of shares withheld from the vote.
Tensions had escalated between Boohoo’s management and the board of Frasers Group, particularly after the latter criticized Boohoo’s leadership amidst the company’s financial struggles. Frasers’ demands for leadership reform came against the backdrop of concerns over governance and potential conflicts of interest, given Frasers’ substantial holdings in Boohoo and ownership of its competitor, Asos.
The resistance to Frasers’ ambitions was bolstered by recommendations from independent proxy advisers, Institutional Shareholder Services (ISS) and Glass Lewis, both of whom advised shareholders to vote against the proposed changes. Their guidance added credibility to Boohoo’s stance and fortified the board’s efforts to maintain its strategy moving forward.
Following the vote, Boohoo leadership expressed gratitude towards shareholders for their support and reaffirmed their commitment to enhancing shareholder value. Tim Morris, Boohoo Group chair, emphasized the focus on delivering the business review to unlock potential value. CEO Dan Finley also communicated his commitment to prompt and decisive action geared towards leveraging the company’s strong infrastructural foundation and brand assets. Finley outlined a vision of discovering significant opportunities for growth, asserting that the group’s valuation remains lower than its true potential.
The decisive rejection by Boohoo’s shareholders underscores a clear preference for the current leadership amidst external pressures.
