(Reuters) – Boohoo on Thursday questioned Frasers’ interests and sought undertakings that would limit the top investor’s influence, a day after it urged the British online retailer to refrain from any asset sale without prior approval.
Boohoo said that it was committed to an “open and transparent” engagement with its shareholders over the strategic review it launched last month, but raised concerns over Frasers’ independence and the level of control it desired.
Sportswear and apparel retailer Frasers, which holds 27% of Boohoo, issued the request on Wednesday after the review was made public alongside CEO John Lyttle’s intention to step down.
Boohoo on Thursday said the review could take “several months” and highlighted Frasers’s holdings in rivals such as ASOS and its own business which competes with Boohoo, as reasons for its reservations.
The company asked for several assurances from Frasers, or reasons why it could not commit to them, before agreeing to any board representation – a major point of contention between the two.
Frasers had previously attempted to appoint its controlling shareholder Mike Ashley for Lyttle’s role, before Debenhams’ Dan Finley was given the role earlier this month.
Boohoo wants to bar Frasers from making an offer for the company while it sits on the board, and for up to a year if it exits, and asked for a commitment that Frasers’ nominee would not be involved in commercial decisions at Boohoo’s rivals.
“The Board considers 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,” Boohoo said in a statement.
Boohoo added that Frasers had not disclosed in its open letter that it had agreed to a meeting with the company to discuss its concerns over asset sales, and over Boohoo’s concerns related to Frasers’ representation on its board.
Boohoo on Thursday also said that Mahmud Kamani, who holds about 23.21% of the company along with affiliates, confirmed that he has no intention to make it an offer, and agreed to make the same commitments required of Frasers if the sportswear retailer agreed to them first.
Frasers did not immediately respond to a request for comment.
(Reporting by Pushkala Aripaka and Unnamalai L in Bengaluru; Editing by Maju Samuel)
