TIDMBOO
RNS Number : 2098E
boohoo group plc
28 June 2023
FOR IMMEDIATE RELEASE 28 June 2023
boohoo group plc
("boohoo")
Further statement on Revolution Beauty Group plc
boohoo, the beneficial owner of approximately 26.6% of the
issued share capital of Revolution Beauty Group plc ("Revolution
Beauty" or the "Company") yesterday attended the first Annual
General Meeting ("AGM") of Revolution Beauty since its AIM IPO in
July 2021.
boohoo wishes to record the serious concerns it has regarding
the conduct of the board of Revolution Beauty at, and immediately
following, the AGM, which it regards as self-serving and not in the
best interests of shareholders as a result of the following
actions:
-- the unilateral attempts of the Company's board to adjourn a
quorate meeting without the approval of shareholders present, which
subsequently failed due to the resolution attracting a 74% vote
against adjournment;
-- the AGM subsequently proceeding with resolutions 2, 3 and 5
all being defeated, with approximately 74% of votes against each of
these resolutions. This resulted in the removals of Bob Holt (CEO),
Elizabeth Lake (CFO) and Derek Zissman (Chair and Senior
Independent Director) from office; and
-- the conduct of the remaining independent director (Jeremy
Schwartz), who post AGM, contravened corporate governance best
practice and disregarded the expressed opinion of the Company's
shareholders. This abuse of process resulted in the unilateral
appointment of two new non-executive Directors and the
re-appointment of the three former Directors who had just been
removed from office by the Company's shareholders.
boohoo fails to see how such a board can claim to be acting in
the best interests of shareholders, and is instead self-serving, as
demonstrated by its actions over the last 24 hours. This will
likely result in significant remuneration and share awards for
members of a self-elected board at the lifting of the suspension of
trading in its shares, which boohoo was pleased to hear is
imminent. It is notable that at no point did the remuneration
committee seek prior shareholder consultation, or approval in
relation to these awards, again contravening best practice in
relation to corporate governance.
boohoo remains supportive of a lifting of the suspension, but
not at the expense of doing so with a board that has proven to
behave inappropriately.
boohoo calls on the board to convene the requisitioned General
Meeting of Revolution Beauty proposing to remove Bob Holt,
Elizabeth Lake and Derek Zissman and to appoint Alistair McGeorge
and Neil Catto as directors without further delay and not to resort
to further attempts to obstruct shareholders and adjourn that
meeting, once convened.
boohoo remains committed to wholesale board changes at
Revolution Beauty and the appointment of a new,
majority-independent board with the right balance of skills and
experience and believes that it is of paramount importance that the
future board of directors of Revolution Beauty have direct and
relevant experience of dealing with its customers.
Further background in relation to boohoo's serious concerns
regarding the conduct of the board at the AGM, and subsequently, is
set out below.
Enquiries
boohoo group plc
Shaun McCabe, Chief Financial Officer Tel: +44 (0)161 233
2050
Alistair Davies, Investor Relations Tel: +44 (0)161 233
2050
Mark Mochalski, Investor Relations Tel: +44 (0)20 3239
6289
Clara Melia, Investor Relations Tel: +44 (0)20 3289
5520
Zeus Capital - Nominated adviser and
joint broker
Dan Bate / James Edis Tel: +44 (0)161 831
1512
Benjamin Robertson Tel: +44 (0)20 3829
5000
Jefferies - Joint broker
Ed Matthews / Harry Le May Tel: +44 (0)20 7029
8000
Buchanan - Financial PR adviser boohoo@buchanan.uk.com
Richard Oldworth / Toto Berger / Verity Tel: +44 (0)20 7466
Parker 5000
Background
On 19 June 2023, boohoo announced that it had notified the board
of Revolution Beauty of its intention to vote against the
reappointment of Bob Holt, Derek Zissman, and Elizabeth Lake at the
AGM. In addition, boohoo requisitioned a General Meeting of
Revolution Beauty proposing to remove Bob Holt, Elizabeth Lake, and
Derek Zissman and to appoint Alistair McGeorge and Neil Catto as
directors, with the proposed board committing to undertake a
rigorous process to appoint additional independent directors such
that the reconstituted board would be comprised of a majority of
independent directors. Further, on 22 June 2023, boohoo announced
Rachel Horsefield, a former CEO of Beauty at THG plc, would be
included in the future independent board appointment process.
Conduct of the AGM
Present at yesterday's AGM were shareholders representing a
majority of the issued share capital of Revolution Beauty,
including representatives of boohoo. This was Revolution Beauty's
first AGM since IPO in July 2021 and the resolutions proposed at
the meeting included resolutions to appoint Bob Holt, Elizabeth
Lake, and Derek Zissman to office given that their appointment to
the board of Revolution Beauty had yet to be voted on by
shareholders and would be required to resign from office if not
appointed by shareholders in the meeting.
In its RNS statement released on 21 June, the board of
Revolution Beauty stated that it would propose at the AGM that the
meeting be adjourned to a new date. In fact, no such proposal was
made at the AGM. Instead, the chairman Mr. Zissman started the
meeting by announcing his decision to unilaterally use his powers
to adjourn the meeting without proposing that adjournment to the
meeting in order for the proposal to be voted on by shareholders in
accordance with the Company's articles of association.
This unilateral decision was said by the chairman to be
justified by concerns that the board has regarding the potential
voting of certain shareholders other than boohoo, and whether such
voting might be in breach of private contractual obligations
between those shareholders and the Company. The chairman declined,
however, to provide further details of these concerns, citing
further concerns regarding confidentiality. Nevertheless, the
chairman informed the meeting that in the board's view its concerns
gave the chairman the ability to dispense with a shareholder vote
on the question of an adjournment, and all other business at the
meeting (including, conveniently, his own appointment and the
appointment of his fellow board members) because it was clear to
the board that the "business of the meeting could not be properly
conducted".
Representatives of boohoo present at the meeting rejected the
chairman's position, pointing out that any concerns of the board
regarding the potential voting of certain shareholders should not
result in all other shareholders being effectively disenfranchised
on the day, particularly where all other shareholders (boohoo
included) are not parties to these private contracts. boohoo's
representatives also pointed out that the meeting, which had been
validly convened and at which a quorum was present, was patently
capable of being properly conducted irrespective of the board's
concerns.
boohoo's representatives at the meeting further pointed out that
if any shareholder in respect of which the board had contractual
concerns did not, in fact, vote at the meeting, those concerns
would in any case be removed.
In its RNS statement released after the AGM, the board states
that "the boohoo representatives requested that the chairman obtain
undertakings to the meeting from certain shareholders that they
would not vote in breach of their contractual obligations". That is
not correct: boohoo's representatives had no authority to make any
such request and did not do so. Rather, they explained to the
chairman that if the relevant shareholders did not in fact cast
votes in the meeting, the chairman had no proper basis on which to
decide unilaterally that the meeting should not proceed.
This was a position which was ultimately accepted by the
chairman. That the meeting then proceeded without any procedural
difficulties reveals, in boohoo's view, the inappropriateness of
the chairman's attempt to disenfranchise all shareholders in
attendance at the meeting irrespective of their contractual
relationships with the Company (or lack thereof). That the meeting
also proceeded to result in the chairman's removal from office, Bob
Holt's removal from office, and Elizabeth Lake's removal from
office, clearly suggests an alternative explanation for the
chairman's attempt to stop the vote, linked not to the best
interest of shareholders but to the personal interests of those
directors who were then removed from office.
Action following the AGM
As it turns out, the board's apparent desire to disenfranchise
shareholders did not stop after the AGM, when it was announced that
the sole remaining director, Jeremy Schwartz, had promptly used his
powers to reappoint all of the directors removed from office at the
AGM and in addition to appoint additional directors chosen for
appointment by those same directors before their removal.
The effect of this is that Revolution Beauty's board of
directors is entirely comprised of directors who have appointed
each other, whose appointments have not been approved by
shareholders and who (in the case of the chairman, the CEO and the
CFO) were validly removed from office at a duly convened
shareholder meeting despite the board's attempts to prevent voting
at that meeting.
boohoo fails to see how a board comprised entirely of directors
appointed by each other, the majority of whom (including the
chairman, CEO and CFO) have attempted to prevent shareholders from
voting on their reappointment at an AGM, can claim to be acting in
the best interests of shareholders.
boohoo remains committed to ensuring that Revolution Beauty has
a majority independent board with the right balance of skills and
experience and believes that it is of paramount importance that the
future board of directors of Revolution Beauty have direct and
relevant experience of dealing with its customers. In light of the
events of the last 24 hours boohoo also considers the current board
of Revolution Beauty to lack not only this balance of skills and
experience but also the ability to prioritise the interests of
shareholders over their own self-interest.
boohoo calls on the board to convene the requisitioned meeting
without further delay and not to resort to further attempts to
adjourn that meeting, once convened.
-ends-
About boohoo group plc
"Leading the fashion eCommerce market"
Founded in Manchester in 2006, boohoo is an inclusive and
innovative global brand targeting young, value-orientated
customers, pushing boundaries to bring its customers up-to-date and
inspirational fashion, 24/7.
In 2017, the group extended its customer offering through the
acquisitions of the vibrant fashion brand PrettyLittleThing and
free-thinking brand Nasty Gal. In March 2019, the group acquired
the MissPap brand, in August 2019 the Karen Millen and Coast brands
and in June 2020 the Warehouse and Oasis brands, all complementary
to the group's scalable, multi-brand platform. In January 2021, the
group acquired the intellectual property assets of Debenhams, with
the goal of transforming a leading UK fashion and beauty retailer
into a digital department store and marketplace through a new
capital-light and low-risk operating model. In February 2021, the
group acquired the intellectual property assets of UK brands
Dorothy Perkins, Wallis and Burton. As at 28 February 2023, the
boohoo group had 18 million active customers across all its brands
around the world.
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