Boohoo Group PLC (AIM:BOO) has responded to aggressive demands to install Frasers Group PLC (LSE:FRAS) owner Mike Ashley as its chief executive, citing Frasers’ partial stake in ASOS PLC (LSE:ASC) as a possible issue.
In a strongly worded open letter published on Thursday, Frasers delivered a savage teardown of Boohoo’s “abysmal” leadership, saying it had “lost its ability to manage Boohoo’s business and investment”.
Frasers proposed installing its founder and majority shareholder Mike Ashley as chief executive to help turn the business around.
In response, Boohoo said it “remains willing to discuss board representation with Frasers in a constructive manner”, but “before any appointment can be made, appropriate governance will be required to protect the company's commercial position and the interests of other shareholders”.
Boohoo cited Frases’ 23.6% ownership of ASOS PLC (LSE:ASC) as a concern.
“Both Frasers and ASOS operate in similar markets to Boohoo. These are important facts that need to be taken into account and carefully considered by the board,” read the response.
Frasers criticised Boohoo’s lack of engagement with its proposals, but Boohoo said it “has sought assurances from Frasers in this regard and they have not to date been provided”.
Boohoo also shot back at Frasers’ criticisms of its recent debt refinancing.
Frasers said new Boohoo’s £222 million facility was “severely short-dated, seemingly more expensive than the previous financing arrangement and almost unquestionably leaves the company in a position of needing to undertake drastic corporate actions”.
This characterisation, said Boohoo, is “inaccurate and unfair… The company's approach to its recent debt refinancing was discussed on numerous occasions with Frasers and its advisers.
“As part of those discussions Frasers were advised that the board would be pleased to consider any alternative proposals they might wish to present, but none were forthcoming.”