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Boohoo shareholders have rejected billionaire sportswear tycoon Mike Ashley’s attempt to join the board of the UK online fast-fashion retailer, following weeks of heated exchanges between the two companies.
A total of 64 per cent of votes cast went against proposals to give Ashley and his business associate, Mike Lennon, seats on the Boohoo board following a meeting on Friday.
Stripping out Frasers’ shareholding, 99 per cent of investors who voted blocked the move, the company said. This does not include a small percentage of shareholders who abstained.
The results come after weeks of barbs traded between Ashley’s Frasers Group, which owns about 28 per cent of Boohoo, and the fast-fashion retailer over the leadership and performance of the lossmaking company.
Frasers has complained about “continued chaos” and “value destruction” after a 90 per cent fall in the value of Boohoo’s shares from their June 2020 peak. Shares rose slightly following the vote, trading at 33p and giving Boohoo a market capitalisation of around £461mn.
Boohoo, in turn, has said that Frasers appeared intent to “destabilise Boohoo and disrupt [the] board’s plans to unlock and maximise shareholder value”.
Separately, investors will vote again in January on whether to oust Mahmud Kamani, Boohoo’s co-founder and executive vice-chair, as director of the group — also at Frasers’ request.
Kamani, who had been friendly with Ashley until Frasers began building its stake in the company in June last year, told the Financial Times on Friday that “he gave birth to Boohoo” and Ashley’s antics “won’t scare me”.
Carol Kane, co-founder and group executive director, was also at the meeting, as was one of Kamani’s three sons, Adam, and several Boohoo board members and advisers. The gathering lasted less than 15 minutes.
Chair Tim Morris said during the meeting that he would have preferred to find a different way of resolving the dispute rather than summoning shareholders of whom only a handful turned up to vote in person at law firm Addleshaw Goddard. He added that Boohoo “respected all our shareholders”.
After the result was published, Morris said the process had been “very disruptive and a distraction” and added that the outcome “speaks volumes” about how shareholders felt.
Boohoo chief executive Dan Finley, who has been in the role for 50 days, said he was “delighted” with the result and he would focus on turning the “massively undervalued” business around.
One retail investor, who asked to remain anonymous, told the Financial Times that the drop in Boohoo’s share price had “not been a pretty picture” but ultimately the board “needed to counter” Frasers’ attempts to wrestle control of Boohoo by seeking to install Ashley on the board and remove Kamani. “Mike Ashley won’t go away,” he added.
Attendees on Friday said Frasers had sent two representatives from law firm White & Case and shareholder adviser Georgeson.
Frasers did not immediately respond to a request for comment.
