// Revolution Beauty hits back at Boohoo as the battle for control rages on
// The beauty business rejected the claim that 74% of shareholders had voted with Boohoo
Revolution Beauty has defended the actions it took at its AGM earlier this week, after it reinstated three executives who had been voted out by shareholders.
The online cosmetics retailer said its decisions had been “firmly validated” by the stock market response, with its shares rising 45% yesterday.
“The response from the stock market and the group’s wider stakeholders firmly validate the actions taken following the AGM earlier this week, which were lawful and entirely consistent with the directors’ legal duties,” Revolution Beauty said.
This morning the group demanded once again that “Boohoo explain what its future plans and strategy for Revolution Beauty would be if its hostile takeover of the company’s board were to succeed.”
Its shares were restored this week after being suspended last autumn amid an accounting scandal.
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Revolution Beauty’s chief executive, chief financial officer and chair were all fired at the AGM after majority shareholder Boohoo Group led a successful revolt.
While 75% of shareholders backed the decision, the trio were then allowed to be re-elected by independent director Jeremy Schwartz.
Revolution Beauty argued that this was the only way to secure readmission to AIM, as firms need a full board of directors.
“The directors did not and do not intend to frustrate shareholder democracy but were put in an extremely difficult position by Boohoo’s actions,” the company said.
READ MORE: Revolution Beauty v Boohoo: the ugly battle over the beauty brand
“The directors faced a binary choice between taking action which would result in the re-admission to trading of the company’s shares the very next day (unquestionably in all shareholders’ interests) or taking action (or inaction) which would have resulted in no re-admission to trading for an unknown amount of time,” it explained.
It also rejected the claim that 74% of shareholders had voted with Boohoo. It pointed out only around 39% of the shareholder base cast votes at the AGM, with only 29% backing the decision.
Revolution said as Boohoo holds a 26.6% stake, only 2.4%of the company’s other shareholders voted with Boohoo.
Following the AGM, Boohoo accused Revolution of “contravening best practice in relation to corporate governance” following the AGM, which Revolution Beauty said was “extremely ironic”.
“As shareholders will be aware, Boohoo has a long and well documented track record of substandard corporate governance and legal, reputational, supply chain and shareholder engagement issues,” the firm said.
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