Mike Ashley Frasers Group Allegedly Sabotaging Boohoo Equity Raise

Allegations have emerged that Mike Ashley’s Frasers Group attempted to undermine Boohoo’s multimillion-pound equity raise. The claims suggest that Frasers sold millions of shares at a discounted price, just as Boohoo announced plans to launch a £35 million cash call.

Boohoo, which counts Frasers as its largest shareholder, aimed to strengthen its balance sheet and support its turnaround strategy by offering shares at 20p each. Market traders assert that Frasers sold many shares between 18p and 19p, shortly after Boohoo disclosed its fundraising intentions.

Data from the London Stock Exchange highlights that approximately 4.37 million shares traded below the 20p mark on the day Boohoo made its announcement. This strategic selling could have a detrimental effect on Boohoo’s share price, potentially unsettling lenders and complicating its equity raising process.

Despite these pressures, Boohoo successfully completed the fundraising, raising £40 million in total. Investor demand exceeded expectations, resulting in the shares being issued at 18p each, a 5 per cent discount to the 19p closing price preceding the announcement.

The event showcases a growing tension between Frasers and Boohoo. Frasers holds a significant 27 per cent stake in Boohoo and has voiced objections to various board decisions, including a previous attempt by Boohoo to change its holding company name.

The ultimatum from Frasers underscores its increasingly combative stance towards Boohoo, which has been a cause for concern in the retail sector. The dynamics between these two companies warrant close observation as they continue to navigate their respective strategies in a competitive market.