Frasers Group PLC (LSE:FRAS) has offered up a few concessions in its ongoing campaign to seize control of flagging beauty online fashion outlet Boohoo Group PLC (AIM:BOO)’s board.
The London-listed Sports Direct owner is seeking to appoint its founder and figurehead Mike Ashley (pictured) as chief executive of the online fast fashion retailer, saying the aim is to reverse its plummeting market valuation.
Frasers is also seeking a board position for restructuring specialist Mike Lennon.
Boohoo, in which Frasers owns a 26.1% stake, has rebuffed all of Frasers’ advances, leading to a bitter war of words between the two companies that has stretched for months.
Today, Frasers has agreed to a number of concessions in an effort to win over shareholders in next Friday's vote.
In an open letter, Frasers said it is willing to provide an indemnity to Boohoo “in relation to any loss that Boohoo suffers if the representations and undertakings in relation to information sharing in breach of competition law are breached”.
Frasers also agreed that Ashley and Lennon would not to be involved in decision-making at Boohoo in relation to Frasers.
The letter – the second sent Ashley this week – stipulated that any decision to merge Boohoo with a competitor or take actions affecting its independence will require board approval and be in the best interest of all shareholders.
The concessions, however, were made with a touch of animosity.
The open letter stated: “We are doing this despite the fact that Boohoo has grossly exaggerated any perceived conflicts and governance concerns as a thinly-veiled excuse not to appoint Mr Ashley and Mr Lennon as directors of Boohoo.
“It is not because perceived conflicts would cause real issues. Even the published opinion of a King’s Counsel made clear that there are no competition law issues with regards to Mr Ashley’s appointment.
“In Frasers’ view, what this boils down to is that Mahmud Kamani, Boohoo’s executive vice chair, does not want Mr Ashley or Mr Lennon appointed, as he fears this would dilute his influence over the board.”
Frasers added: “There are a small number of commitments which Boohoo is demanding which have no basis in law and are not deemed acceptable corporate practice.
“As far as we aware, none of the current Boohoo directors have made the same commitments.”