Manchester-based online fashion firm Boohoo Group said independent proxy adviser Institutional Shareholder Services Inc. (ISS) has recommended that Boohoo shareholders vote against the resolutions at its December 20 AGM “which seek board representation for Frasers.”
Boohoo said: “ISS states that Frasers has offered a superficial view of performance and no specific plans for change and the two Frasers candidates, Mike Ashley and Mike Lennon, have real conflicts of interest, concluding that board change at Boohoo Group is not warranted.”
The Manchester-based company is looking to right itself after a collapse in its shares over the past few years and is fighting off Mike Ashley’s attempt to take control.
Last month Ashley’s Frasers Group, which owns about 27% of Boohoo’s shares, ramped up its attack on Boohoo by demanding that co-founder and executive chairman Mahmud Kamani be kicked off the board and replaced by Ashley.
Boohoo said the ISS recommendation is in line with the unanimous recommendation of the company’s board which has previously outlined its reasoning to investors.
The fashion firm said: “The board has a credible plan to unlock and maximise value for the benefit of all shareholders through its Business Review and in Dan Finley has the right CEO to lead the business …
“Frasers appears intent on disrupting Boohoo’s Business Review, destabilising the company and acting only in its own commercial self-interest. Frasers has prior history of this sort of corporate behaviour …
“Shareholders are being offered no protections in relation to the obvious risks presented by Frasers’ demands …
“Mike Ashley is conflicted and not a suitable appointment to the board …
“Mike Lennon is a practicing insolvency expert with a history of working closely with Frasers; shareholders should ask themselves why Frasers would want him in situ at Boohoo …
“The board is not deliberately seeking confrontation with Frasers, but will at all times act in the best interests of the company and all shareholders …”
Boohoo Group 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.”
Finley said: “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.”