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BFD - just let the trolls do their trolling, they are irrelevant at this stage. Best focus on these latest developments, and don’t clog up the feed responding to nonsense.

Ashley would need access to the books, so that he could see how Debenhams are performing. As he has no more information than the rest of us he could not make an offer for any part of the business. The Kamani clan have the advantage of being insiders, and they could take private the best performers, leaving shareholders with the rest.

These are interesting times for shareholders but they can also be dangerous times if the team that are supposed to be looking after your interests are only looking after their own.

If the numbers stack up you could IPO the Karen Millen brand separately … but at the very least you are likely to receive competitive bids in the event of a sale as a stand alone brand.

I agree, they have demonstrated only care for themselves. Every incentive package created would make them a ton of money on top of salaries and bonuses … paid for by those shareholders whose interests they are supposed to be looking after. The last attempt in May was stopped by Ashley … and that’s why I am glad he holds a significant stake. But, having said that, he also needs watching.

The company responded to the Frasers requisition … it is still reviewing it with advisors.

Goes on to address some concerns around governance issues given that Ashley owns Frasers and a large stake in ASOS. And then defends the new debt arrangements, suggesting that Ashley did not propose alternatives.

I suspect it’s going to be a back and forth of letters until this matter is resolved.

A short commentary in The Sun quoted Peel Hunt who suggested that Karen Millen is a £300 million brand. If anywhere near true that would wipe debt away in itself. None of that is reflected in the SP.

Https://www.theguardian.com/business/nils-pratley-on-finance/2024/oct/24/boohoo-was-already-a-governance-mess-enter-mike-ashley-for-extra-complexity

The journalist makes some interesting points.

At this moment in time I actually prefer Ashley's involvement as he will ensure that the Kamani's don't run down the business to take it private, something we all have to be aware of. Friction between them might be in all our interests.

PART TWO

Boohoo announced a strategic review of options “to unlock and maximise shareholder value” last week, raising the prospect of brands such as PrettyLittleThing, Dorothy Perkins, Burton, Warehouse and Wallis being sold. Frasers is understood to be concerned that Kamani wants to buy back the brands himself.

The review has also set the stage for a boardroom tussle between Ashley and Kamani, who are long-term rivals. A confrontation has been brewing since Frasers started building a stake in Boohoo in June 2023.

The pair are said to have had a row over FaceTime recently. Somewhat surprisingly, Sir Philip Green, the former “king of the high street”, was said by one source to be the middleman trying to restore calm between the two. The row came after Boohoo was forced to retract its multimillion-pound executive bonus payouts in May and to cancel a vote on its incentive plan after a backlash from investors.

Clive Black of Shore Capital said: “Whether this is good for Boohoo shareholders remains to be seen. One senses it may not be all bad albeit the extent to which Frasers has a conflict as a firm that may want say Debenhams in its one fold whilst being a potential CEO of Boohoo is an interesting one. Get out the popcorn.”

Https://www.thetimes.com/business-money/companies/article/mike-ashley-boohoo-chief-executive-frasers-20rnjfrvt

PART ONE

The retail tycoon Mike Ashley has launched a bold attempt to become chief executive of Boohoo as he pushes for a possible merger between the troubled fast-fashion retailer and its rival Asos.

The proposal by Ashley’s Frasers Group would reshape the online fashion retail landscape, aiming to consolidate two of the UK’s biggest digital players while expanding his influence over the industry.

The group behind Sports Direct, House of Fraser and Flannels, which has a significant stake in both Boohoo and Asos, is thought to see value in combining Asos’s access to brands with Boohoo’s appeal to a younger demographic. It also sees it as an opportunity for Frasers Plus, its buy-now-pay-later service, The Times understands.

Both Asos and Boohoo have struggled following the arrival of ultra-fast fashion rivals such as Shein. Shares in both Asos and Boohoo are down by about 90 per cent over the past five years.

Mike Ashley’s group has built a 27 per cent stake in Boohoo

Mike Ashley’s group has built a 27 per cent stake in Boohoo

CHRIS J RATCLIFFE/BLOOMBERG/GETTY IMAGES

Asos is understood to be against the merger option, however, as it does not wish to be associated with Boohoo’s brands.

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Frasers called for Boohoo to replace John Lyttle, its outgoing chief executive, with Ashley in an open letter after news that the company could be broken up.

Ashley’s retail group owns 27 per cent of Boohoo and has warned that the fast-fashion outlet “urgently needs to address the management of its business” owing to its “abysmal trading performance and share price collapse”. The FTSE 100 group said that appointing Ashley to the top job would be “the best solution to Boohoo’s leadership crisis”.

In the letter Frasers said: “The company’s revenue for the six-month trading period ending August 31 2024 is down around 36.5 per cent. We expect that gross profit will follow the declining trend of revenue, and when Boohoo announces its half-year results in full in November, gross profit will be down for the sixth consecutive reporting period.

“The board has presided over a long-term collapse in Boohoo’s share price, which has fallen over 29 per cent year to date, and 17 per cent in the last three months.”

Frasers also accused Boohoo of failing to properly respond to its demands for a refresh of the board. Frasers said it had been subjected to “delay and ignore” tactics when trying to hold a meeting with Mahmud Kamani, the executive chairman.

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The letter said: “We recognise stonewalling when we see it, and these tactics of ‘delay and ignore’ are no longer tolerable in the context of the continued value destruction that the board is overseeing at Boohoo.”

Reardon - they couldn't care less about their "image", and we are living in a world where shamelessness is a celebrated characteristic. Every retail shareholder needs to be aware ... look how Philip Green behaved surrounding the BHS pension fund holders. They don't care ... you just have to hope that retail shareholders interests align with Ashley.

Buying cheap following bankruptcy might be difficult because an Administrator will seek many bids, and you could lose the brands to a competitor. But you could overspend/invest operationally to strengthen the business for the future, and generate even poorer results in the short term, watch the SP tank further and then make a low ball offer to shareholders ... a take it or leave it option. And then benefit from that investment once you are a private operator.

James ... I'm not sure Ashley could afford to buy both. I suspect what the Times mean is that he wants to use his shareholding to force the issue. If he becomes CEO of Boohoo he can drive it through from that side, but I'm not sure that he can make ASOS do so if they don't want to.

Do you really think he was the driver of the business? I suspect the Kamani's drove key strategic decisions. I recall that the business was being criticised because it lacked a DC in the US ... and that has turned out to be a huge waste of resources. The purchase of the London office was most likely driven by Kamani. As were the new brand purchases. The company thought the pandemic surge marked a turning point in online usurping bricks and mortar retailers ... and to be fair I think many analysts thought that as well. I'm talking in hindsight of course, but they could have ended the pandemic with the same business, no debt and a pile of cash. But that is hindsight.

The Times is reporting that Ashley wants to merge ASOS with Boohoo. It is on the web site and will probably be in the newspaper business section tomorrow. They note that ASOS are not keen in being associated with Boohoo's brands.

I'm currently reading an updated report from the Times, which will probably be available in the newspaper tomorrow.

It claims that Ashley is pushing for a merger with ASOS - he sees value in combining ASOS's access to brands with Boohoo's appeal to a younger demographic. He also sees it as an opportunity for Frasers Plus, his buy now play later service. ASOS is thought to be against the measure as it does not want to be associated with Boohoo's brands.

It goes on to state that Frasers is concerned that Kamani wants to buy back the brands himself.

So that's very different to what most of us have been speculating about today, and would explain why Umar suddenly appears followed quickly by the exit of John Lyttle. I did not detect any friction with regard to Lyttle's departure, and the fact he was staying on until a new CEO was appointed indicates that there is still an amicable relationship between them all. So why did he leave? Possibly because his chance of landing a fortune with a SP recovery disappeared once the company went private?

So perhaps Ashley might be a white knight after all, saving us from being stiffed by Kamani?

Appointing a CEO requires an ordinary resolution, which involves 50% of the votes.

Has anyone tried to calculate where Ashley gets the 23% from? Bear in mind many retail investors will not get a vote due to nominee holdings.

My broker is Halifax. Does anyone know if I will be able to vote if this goes ahead?

I don’t think he has the money to make a cash offer, unless he is working with another entity. I can’t see him taking on debt. However, an offer of Frasers shares and some cash might well be successful.

But that would not be easy if he became CEO, as there would be a significant conflict of interest in doing so whilst sitting on the Board.

I don't see Ashley as CEO and Kamani as Chairman ... it would be a very different dynamic than with John Lyttle as CEO, as I never actually believed that he was in charge at all. Something would have to give.

I just hope that when Ashley talks about the interests of all shareholders he actually means it.

Hexam - by the sound of the letter Ashley has been reaching out and Kamani has been stonewalling him. Without the Mulberry distraction the tanks are on Kamani’s lawn.