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Tomorrow we have the Budget. A rise in Capital Gains Tax and the abolition of the Inheritance Tax benefit of holding AIM shares.

Surprised no one discussing?

Themolecatcher - thanks.

Wow. That is significant. They are shopping around the assets or gearing up to buy them themselves. And that's why Mike Ashley has come out of semi-retirement. And that's also why he's gone from asking for a non-executive board member to putting himself up for CEO.

No idea how this pans out but something is going on.

I would be very interested to know when Bohoo 2 was established at Companies House?

It looks very much to me that they are going to take the company, or parts of it, private ... and my concern is that they will sell shareholders down the river. So whilst I'm cautious about Ashley, I am glad he is a significant shareholder.

As for the Kamani's, they built a great business founded in 2006, and Umar must be commended for his achievements. But they look like champion boxers who are now wealthy and don't have the drive or focus anymore. It seems to be all about celebrities and showing off wealth on Instagram. I've been quite patient but recent events like incentives and bonuses, not to mention the massive resources wasted in the US has led me to conclude they should either sell the assets (at fair value and in the interests of all shareholders) or let someone else take over.

Umar Kamani is the guy who paid 22 year old Molly May Hague £400,000 a month to be Creative Director. He shouldn’t be in charge of anything, least of all be CEO. He’s only back to take the company private on the cheap. Thank goodness Ashley is around to challenge that.

Just wondering what both parties in this dog fight are doing? The Board will know by now whether the EGM requisition is legal … I suspect it is.

So do you call it? Do you then try to get the support of the Institutions to defeat it in a vote?

I guess Ashley will be approaching the same people, to get the motion passed in a vote.

Or do they offer Ashley something to avoid a public spat .. a Board seat for example, but not the CEO position?

And if they reject him out of hand what then?

I don’t get any sense that Mike Ashley is viewed as a bidder for the company. The Mulberry bid was much lower than this one would be, and well within his financial comfort zone. The newspaper speculation is that he wants to merge the company with ASOS, despite ASOS not being interested.I suspect he wants control to make sure the Kamani’s don’t try to pull a fast one. He knows all the tricks. He might also want to be in place so that he can offload bits of the company and pick up assets like Debenhams for himself. He’s already done a deal with Shein and they might be a natural buyer for the fashion brands … but not until after their IPO happens. They won’t want the distraction of a takeover bid.

And who knows, others might be interested as well. Until an event happens or rumours circulate I can’t see shorts running for the exit.

I suspect it is an error, or a misread. The market would be the first to update.

I'm not so sure. The problem for Ashley is that he can only buy 3% without triggering a takeover, and I don't think that is what he is looking to do.

I agree though that we should all be very vigilant about any moves Ashley or Kamani makes.

IParsnip - we are in volatile territory, and have been for the last two years. If a takeover rumour were to circulate I think you'd get your money back and change. It is impossible to say what the end game will be, but I think we will find out within the next 12 months.

Debacle - I posted the article in four parts when I noticed it online Saturday evening. So go back to Saturday evening, even though it was in the Sunday newspaper.

Southcoast - correct. There will be lots of interesting updates in coming weeks, let's freeze out the idiots by simply ignoring them.

South coast - the problem with your post is engaging with trolls. So today the board is going to be full of back and forth taunts and barbs that are completely irrelevant to anyone reading posts. This is why decent holders don’t participate. There is another well known board that is a cesspit … let us not do the same to this one.

Debacle - agree. The Board gets flooded with irrelevant nonsense. Can we keep discussions about current events, and don’t feed trolls.

I didn't detect any animosity regarding the Lyttle resignation, that's why he is staying on until a replacement is found. My suspicion is that his lucrative incentive package was up in smoke, as the Kamani's were now looking at taking the company private. So he exits. I read somewhere that is why Ashley has taken action. The Boohoo response suggested that he was originally asking for a representative non executive, but that has now changed.

Southcoast - honest answer is that I really don't know. I can only speculate.

My guess is that the company will not survive as a stand alone listed company. What we are seeing is a battle for the spoils. The surprise return of Umar and the departure of Lyttle led me to think that the Kamani's were looking to either go private in whole or in part. Ashley wants control to make sure that he doesn't get stiffed, I'm note sure he has a long term plan, other than perhaps a merger with ASOS. I'm not convinced that move would work either. On balance I am glad he is on board because retail shareholders are powerless here.

I just don't see that happening. They have sat back and watched RNS after RNS emanate from Frasers, owning more and more of the company they built. I genuinely believe that they expected the business to have turned around by now and that Ashley would cash out somewhere along the line.

I'm sure the Kamani's have great wealth but it may not be liquid and easy to get at. So I don't expect to see them buying more shares. Unfortunately for them Ashley has built up a pretty large percentage of the shares and he is close to calling the shots. They may end up being bystanders in the end game.

I don't see any panic with shorts either, Voltaire. They have time to exit. The danger of course is being blindsided by an unexpected offer from an unexpected source. That would be painful, but great to watch.

Ashley was up against the Ong family, who owned over 50% of the equity. They are the shot callers at Mulberry. I think Ashley thought they might sell out if he offered an amount that they'd deem reasonable.

Boohoo is different because Ashley is the major shareholder and if he can garner the support of two institutions he can get control. If enough retail shareholders vote he might not need both institutions.

But I still see the possibility of Shein involvement especially after their IPO, if it takes place in London. Ashley has already dealt with them, and a plug and play operation with brands might well be attractive to them. I'm not convinced about their long term invincibility, as they are only a couple of legislative moves away from a drastic change to their business model. Ashley would then pick up his much coveted Debenhams, and possibly Karen Millen.

But that is just idle speculation on my part ... really, anything could happen and there are many possible scenarios.

PART FOUR

But a Frasers shareholder took the opposite view. He said of Ashley’s quest to join the Boohoo board: “What amazes me is that, with all the businesses he has turned round, why don’t they give him a chance as CEO?” An ally of Ashley added: “Making anyone else the CEO of Boohoo at this point is like giving a racing car to someone who can’t drive.”

Frasers has hired the shareholder advisory firm Georgeson to rally other investors around Ashley’s plan. To win the vote, he has to persuade Schroders, the fund manager that owns 7 per cent of Boohoo, and William Barker, head of the investment fund Camelot Capital and chairman of the carpet shop Tapi, who owns 5 per cent. ᐧ

But there remain those who doubt that Ashley truly wants the job, questioning why he would want Boohoo’s mixture of brands, ranging from Nasty Gal and Karen Millen to Warehouse and Burton. Some think he may be playing a game simply to oust his old rival Kamani. Another theory is that ultimately he just wants to find a way of getting his hands on Debenhams — nearly four years after Boohoo took it from under his nose.

It is not clear how he would do this, and one retail industry boss said: “I don’t think he knows exactly what he’s doing.”

It is also unclear how a Boohoo run by Ashley could navigate its way through City governance issues. Ashley owns 73 per cent of Frasers, and Frasers owns 24 per cent of Boohoo’s major rival, Asos.

But Ashley rubbished such talk: “If appointed, I would be one of many board members. Any suggestions that conflicts will be an issue here are total nonsense.”

Business & Money

Companies

PART THREE

Christopher Wootton, Frasers’ burly chief financial officer, hired by Ashley in 2017, hit the roof. He called his opposite number at Boohoo, the seasoned Stephen Morana, formerly of Betfair and Cazoo, claiming that his team had been misled about the timing of the refinancing. Boohoo dismissed this claim.

One ally of Ashley described the Boohoo plan as “the worst refinancing deal that a public company has done in living memory”. It included a £125 million revolving credit facility until October 2026 and a £97 million loan payable by next August.

Frasers thought that the agreement was precarious and short-sighted. The deal, it argued, extended Boohoo’s loan repayment only by several months, and with a £97 million debt repayable in ten months, they believed it would run into issues when the firm’s auditors signed off its books. Boohoo said that Frasers’ characterisation of its debt agreement was inaccurate and misleading. It also said that the agreement was reached by four reputable banks and that it was in the best interests of shareholders.

Frasers was also concerned that Boohoo’s strategic review could lead to a break-up of the business, which includes Pretty Little Thing and Karen Millen, as well as Boohoo and Debenhams, without sufficient shareholder engagement.

Later that Friday evening, Frasers privately told Boohoo that it wanted Ashley to replace Lyttle as chief executive, giving the board 48 hours to consider.

On Thursday last week, with no response forthcoming, Frasers went public. It declared to the stock market that Ashley should become Boohoo’s chief executive, and that another of his allies, Mike Lennon at the restructuring firm Kroll, should be brought in as an adviser. They demanded a shareholder meeting to vote on Ashley’s appointment. Boohoo has denied that it had delayed or ignored responding to Frasers’ requests for board representation.

Ashley explained his thinking to The Sunday Times yesterday: “The focus here needs to be on urgent and decisive action to sort out the mess that Boohoo is in after suffering serious mismanagement. The resignation of their CEO and the announcement of a disastrous refinancing was the final straw.”

In the wider retail sector, Frasers’ proposal to make Ashley the chief executive of Boohoo has been met with disbelief in some corners. One grandee questioned whether Ashley has the necessary time and experience to thrive in online retailing.