Frasers Group has openly criticized Boohoo Group for its recent CEO appointment and asset sale strategy.
- Frasers demands shareholder approval on any future asset disposals by Boohoo, highlighting concerns over recent financial decisions.
- The group describes Boohoo’s actions as desperate, questioning the rush in CEO hiring and lack of engagement with key stakeholders.
- Boohoo’s recent CEO change is seen as an attempt to bypass shareholder influence, according to Frasers Group.
- Frasers insists on independent evaluation of any potential asset sales to ensure fairness and shareholder interest.
Frasers Group has issued a stern critique of Boohoo Group, focusing on what it perceives as hasty decisions in appointing a new CEO and outlining potential asset sales. Frasers, which holds a significant 27% stake in Boohoo, has expressed its dissatisfaction through an open letter, calling for Boohoo to openly confirm that no asset sales will occur without shareholder consent.
In its correspondence, Frasers demanded that any disposal of Boohoo’s assets should be subject to prior approval by shareholders. Additionally, they requested that an independent adviser or investment bank verify that any terms of disposal are equitable and favor Boohoo’s shareholders’ interests. The firm criticizes Boohoo’s leadership for poor refinancing efforts and accuses it of undermining shareholder influence by hastening the CEO appointment process.
The tension escalated when Boohoo appointed Dan Finley, previously Debenhams’ chief executive, as its new CEO to succeed John Lyttle. This decision followed Frasers Group’s earlier proposal to have Mike Ashley succeed in the role, a suggestion Boohoo robustly countered, emphasizing that the CEO selection is a pivotal board decision requiring careful governance.
Boohoo defended its position by dismissing Frasers’ claims as inaccurate. Despite this, the discord highlights Boohoo’s current market challenges, with Frasers cautioning that any asset sale under current market conditions could lead to undervaluation, thus harming shareholder interests. Frasers calls for transparency and collaboration, suggesting that Boohoo’s methods are not serving the shareholders well.
In summary, Frasers Group continues to press Boohoo for more stringent shareholder involvement and fair procedures concerning its strategic decisions.
