Member Info for FED1

Bfd,

I just checked my contract notes. I first bought BOO on 1st March 2022 at 83.6p across my SIPP, ISA and GIA.

Hence why I am a bit peeved.

I forgot to add on the £190m paid for Boos shares to net debt.

However conclusion still the same, Fraser’s can support over £1bn in net debt and take control of Boo.

Anyway, I think that was a good question Pauledee on whether Fraser’s will go for 51% control.

1) Boohoo has 1.269 Bn shares. Let’s assume it offers 60p and get another 25ppt in shareholding. This would cost it £190m plus fees.

2) Fraser’s is cash flow generative but it is investing a lot. Net debt grew to £725m. It would have to consolidate Boo debt at Group Level adding another £150m. In total, it has group debt of 875m pro forma.

3) Frasers has EBITDa estimate of £883m according to Morningstar. Essentially, 1x net debt to EBITDA.

4) I reckon Fraser’s could easily afford it although its minority investors may not be happy.

Sadly I did get in two years ago.

Is Boohoo Rider some venture capitalist?

I originally got in two years ago thinking it would rebound. Paid 80p originally but have successfully traded to get my average down to 70p.

Ultimately I do think that Youth Brands are key to getting this significantly higher. There doesn’t seem to be a plan for this apart from cutting costs as revenues fall.

I am open to spinning off Debs into separate entity and turning it into omnichannel/consumer credit business. Maybe that is where the BoD work with Frasers.

Thanks Alex for clarification

I wasn’t on call - could you clarify.

Did someone state that Boohoo received two good offers already for some of its brands?

Maybe Boo BoD should first meet ISS Board Composition guidance (pg 13-14) on independence before heralding its backing. By ISS calculations, only 3 of the 9 could be classified as independent.

https://www.issgovernance.com/file/policy/active/emea/UK-and-Ireland-Voting-Guidelines.pdf

A Board should be majority independent. That means 5 out of the 9.

To be independent:

In line with the UK Corporate Governance Code:

▪ Has been an employee of the company or group during the last FIVE years;

▪ Has, or a connected person has had, within the last THREE years, a material business relationship with the

company either directly, or as a partner, shareholder, director or senior employee of a body that has such a

relationship with the company;

▪ Has received or receives additional remuneration from the company apart from a director's fee,

participates in the company's share option or performance-related pay schemes, or is a member of the

company's pension scheme;

▪ Has close family ties with any of the company's advisers, directors or senior employees;

▪ Holds cross-directorships or has significant links with other directors through involvement in other

companies or bodies; or

▪ Represents a significant shareholder*.

▪ Is attested by the board to be a non-independent non-executive director;

▪ Is a former board chair;

▪ Has a substantial personal shareholding of ≥ 1 percent; or

▪ Tenure (see next section).

*Recognised as a holding of ≥ 3 percent.

Boo does not have five directors who meet this criteria. ALthough adding Frasers wont help either, it does rectify the issue of a BoD controlled by Kamani.

https://www.issgovernance.com/file/policy/active/emea/UK-and-Ireland-Voting-Guidelines.pdf

For me, the issue is with current Board composition.

A Board should be independent. I do not believe BOO Board is although it has 5 "independent non exec" directors. I believe Kamani has control of BoD. Hence, I feel Frasers will bring balance.

1) One of the non executive directors has been on BoD since 2014, therefore cannot be classed as independent.

2) The other non executive directors were Chair or members of the Remuneration committee that sanctioned that ludicrous bonus scheme for executives.

Look at this page and ask yourself if this BoD is majority independent non execs?

https://www.boohooplc.com/group/board.htm

Correction:

The UK Corporate Governance Code

not the Stewardship Code. That is something else

https://media.frc.org.uk/documents/UK_Corporate_Governance_Code_2024_a2hmQmY.pdf

When it comes to corporate governance, I believe the UK Stewardship Code should be a benchmark.

https://www.frc.org.uk/library/standards-codes-policy/stewardship/uk-stewardship-code/#the-uk-stewardship-code-2020-abd12c04

Board composition is very important. We need strong independent directors as Chair and in charge of the Nomination and Remuneration Committees. The fact that Kamani was only until recently the Executive Chairman and the BoD are puppets of Kamani, suggest ISS has not being doing its job in protecting minority shareholders.

https://www.responsible-investor.com/iss-delisted-from-uk-stewardship-code-by-reporting-regulator/

Trust your own instincts. Vote how you wish.

I use to work in industry and the institution I worked for used ISS. I worked on a desk with two people and we had a 100 stock portfolio.

Corporate Governance was a tedious part of the job. YOu had to vote on 100 AGMs each with c.13 resolutions. Then you had EGMs as well. It was my responsibility and I simply did not have time to do research. You therefore got paid for research from ISS.

However, institutional investors will not be taking ISS's view into consideration with this EGM. They will have their own strong opinion.

I think the retail investors on this Board have better insight into the meaning of this EGM than ISS.

But I agree with other posters that it is telling that he only focuses on Debs, and the Youth Brands, which are no doubt the main issue, are an afterthought.

Well the reality for Ashley is that shareholders vote for the BoD, and the BoD chooses the CEO.

He realises he cannot get the BoD to choose him.

If you believe the motive set out in letter, he just wants to stop any ill-thought out disposals of core assets.

To be fair, he was announced as CEO after Ashley put himself forward.

It seems Ashley no longer wants CEO role. He is happy to work collaboratively with Dan. This is a positive development.

Geordie,

Did ISS give its reasoning?

Ultimately, although I appreciate the influence it has, I think the fund managers will make their own judgement on this.

Maybe this is Frasers agenda. 51% control.

The EGM is purely a stalling tactic to stop Boo arranging a disposal of Debs before he is ready?