Frasers warns Boohoo not to sell assets without shareholder approval

Frasers has demanded Boohoo publicly declare it will not sell assets without shareholder approval, as the pair’s high-profile dispute gains momentum.

The retail giant urged the struggling fast fashion brand to “stop, once and for all” its “absolute disregard for shareholder views”, alleging that Boohoo had refused to privately agree to consult shareholders before sell parts of the business.

Frasers, which is a 27 per cent shareholder in Boohoo, has been at war with the group over a sharp drop in the share price, weak profits and fierce disagreements over the company’s future.

Last week, Boohoo appointed Debenhams boss Dan Finley as its new chief executive, crushing demands from Frasers for the appointment of its founder, Mike Ashley.

Frasers had called on Ashley to take the helm as he criticized “abysmal” performance and “mismanagement” which he believes has led to a more than 90 per cent collapse in Boohoo’s share price since its peak in the Covid era.

But Boohoo defended the decision, agreed unanimously by the board, saying Finley was “the obvious internal candidate” for the role.

Frasers wrote on Wednesday that Boohoo had “rushed the appointment of a chief executive to try to block shareholder input” over the company’s leadership.

“This has to stop,” he added. ‘What will they try next? Desperate people do desperate things.

Frasers said Boohoo had not “substantially engaged” with a written confirmation request in October “would not commence any process or enter into any agreement… for the disposal of any of Boohoo’s assets without first engaging with Frasers on alternative options “.

It warned: “Given the market headwinds and trading difficulties currently facing boohoo, any disposal of assets by the Company, including any of its five core brands or the Soho office, would be executed from a position of weakness and it would unquestionably be at a discounted valuation and would therefore be totally unacceptable without prior shareholder approval.

Frasers said Boohoo must “publicly and urgently confirm” that it “will not sell any assets or lines of business… without prior shareholder approval”.

It also required Boohoo to publish, before any sale, “confirmation from an independent global adviser (or) investment bank that the terms of the disposal are fair and reasonable, the disposal has been carried out at arm’s length and the disposal is carried out under the best conditions”. interests of Boohoo shareholders.

Frasers company secretary Robert Palmer wrote: “The restriction on disposals without shareholder approval and the requirement for confirmation from an independent global investment bank/advisor are necessary to protect the interests of boohoo, its shareholders and its interested parties”.

Boohoo declined to comment.