UK-based fashion retailer Boohoo Group PLC (GB:BOO) has urged its shareholders to oppose a leadership push from Mike Ashley’s Frasers Group PLC (GB:FRAS). Boohoo stated that the independent proxy adviser Institutional Shareholder Services (ISS) has suggested its shareholders vote against Frasers’ attempt to gain seats on Boohoo’s board. The resolutions will be voted on at Boohoo’s general meeting scheduled for December 20. Following the news, FRAS stock fell by 1.57% as of writing, while Boohoo gained 1.46%.
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Frasers Group, founded by billionaire Michael Ashley, owns a range of popular brands across clothing, sports, and lifestyle products. Meanwhile, Boohoo Group is an affordable online retailer with brands like Karen Millen, PrettyLittleThing, Debenhams, and more.
Frasers Group Challenges Boohoo’s Leadership
Frasers, Boohoo’s largest shareholder with a 28.1% stake, has been pushing to remove co-founder and executive chairman Mahmud Kamani. The company is proposing its own nominee, Mike Ashley, as a replacement. In his recent letter, Ashley criticized the company’s leadership, pointing to underperforming brands and a lack of clear strategy to reverse the decline.
However, ISS argued that Frasers Group’s assessment was superficial, lacking specific plans for change. It also highlighted potential conflicts of interest if Mike Ashley joined Boohoo’s board and stated that a leadership change at Boohoo was unnecessary.
Meanwhile, Boohoo remains focused on maximizing shareholder value and fully supports ISS’s recommendation to reject Frasers’ proposals. In October, the company launched a strategic review to enhance shareholder value and has also been evaluating options for its non-core, non-strategic assets.
Are Boohoo Shares a Good Buy?
As per the consensus among analysts on TipRanks, BOO stock has been assigned a Moderate Sell rating based on five Holds and three Sells. The Boohoo share price target is 25.77p, which is 27% below the current level.
