Boohoo slams Frasers for focusing on ‘own commercial self-interest’

In the latest instalment of the saga between Boohoo Group and Frasers Group, Boohoo has now slammed Mike Ashley’s Frasers for seemingly acting “on its own commercial self-interest” and focusing “solely on the value of its investment”.

Responding to Frasers’ letter issued November 6, Boohoo reaffirmed its commitment to a strategy launched earlier in October through which it is aiming to maximise shareholder value by reviewing options for the group’s main divisions, possibly resulting in a break up of its portfolio.

After its request to appoint Ashley CEO of Boohoo was turned down, Frasers demanded for shareholder approval before any assets of the group were sold, stating that such a move “would be undertaken from a position of weakness”.

Boohoo, however, noted that Frasers was a shareholder of direct competitors to its own brands, and that its board considered it “wholly inappropriate for Frasers to seek to leverage its significant shareholding in Boohoo and other UK retailers to promote its own commercial self-interest” at the “expense of other shareholders”.

Boohoo co-founder confirms no intention to make offer

In regards to Frasers’ request for board representation, Boohoo underlined commitments it expects from the group which “reflect basic standards of acceptable corporate behaviour”.

These include the requirements that the selected director would not be commercially involved with any direct competitor; any undertakings associated with the two firms are to be conducted at arm’s length commercial terms; and a statement from Frasers that it had no intention of making an offer for Boohoo or any of its subsidiaries.

It was also noted that Mahmud Kamani, Boohoo’s other major shareholder of 23.21 percent, has confirmed he does not intend to make an offer for Boohoo, and would provide the board with the same assurances enforced onto Frasers.

Boohoo concluded: “The board believes that the group is fundamentally undervalued and looks forward to unlocking and maximising shareholder value through the review of its options. The board is absolutely focused on maintaining high standards of corporate governance, as can be seen by the commitments the board is seeking and have been offered by Kamani.

“It stresses to Frasers that their continual legal letters and public posturing are not conducive to maximising value for all shareholders, and encourages them to enter into constructive discussions with the board.”