Boohoo and Revolution Beauty agree settlement deal after bitter public spat

Boohoo and Revolution Beauty have agreed a settlement deal in a move that has ended their bitter public spat.

The fashion giant has agreed to withdraw its request for a general meeting of Revolution Beauty's shareholders where it was to seek major changes to its board.

Also as part of the deal, Revolution Beauty's chief executive Bob Holt and chairman Derek Zissman have agreed to resign from the board. Mr Holt will remain with the business as interim CEO until August 31.

Alistair McGeorge, Neil Catto, Rachel Horsefield and Peter Hallett will join Revolution Beauty's board while Elizabeth Lake will remain as chief financial officer.

Mr McGeorge will become executive chairman, Mr Catto a non-independent non-executive director and Mr Hallett an independent non-executive director alongside Rachel Horsefield.

In a statement issued to the London Stock Exchange, Revolution Beauty said: "The settlement agreement between Revolution Beauty and Boohoo will bring to an end the uncertainty regarding the company that followed the requisition on 19 June 2023.

"Pursuant to the settlement agreement, Boohoo has withdrawn the requisition, but because the notice convening the general meeting of the company pursuant to the requisition has already been sent to shareholders, the board will still be obliged as a technical matter to hold the general meeting on the date for which it has been convened.

"The general meeting will therefore be held at 11:00 a.m. on 7 August 2023, at the offices of Macfarlanes LLP.

"However, the board intends, with the consent of shareholders present at the general meeting, to adjourn the general meeting indefinitely, such that there will be no vote on any of Boohoo's proposed resolutions.

"Under the settlement agreement, Boohoo has undertaken (among other things) to attend the general meeting and to vote its entire shareholding in favour of such an adjournment (or, should the proposal to adjourn the general meeting not be approved, to vote against the resolution to remove Elizabeth Lake as a director).

"Given the size of Boohoo's stake in Revolution Beauty, and the board's unanimous recommendation to vote in favour of any proposal to adjourn the general meeting it is considered likely that the proposal to adjourn the general meeting indefinitely will be passed."

It added: "The independent directors of the company (being those directors who are not individually party to any of the arrangements described in this announcement believe that entry into the settlement agreement and related arrangements are in the best interests of the company and its shareholders.

"Entry into the settlement agreement with Boohoo brings to an end the recent uncertainty regarding the company, avoids the ongoing costs and disruption that would be associated with any alternative courses of action, and allows the company to get back to focusing on its core business objectives.

"This is particularly important for Revolution Beauty in light of the significant disruption that the group has faced in the past year, including the suspension from trading of the company's shares and an independent investigation, in each case as a result of historical issues in the business, as summarised in the company's prior announcements."

Background

Manchester-headquartered Boohoo had been seeking to take control of Essex-based Revolution Beauty by drastically changing the personnel on Revolution beauty's board.

Boohoo first invested in Essex-based Revolution Beauty in August 2022 and further upped its stake in November last year.

It now holds a stake of over 26% in the company and is its largest single shareholder.

Revolution Beauty was founded by Adam Minto and Tom Allsworth in 2014. It launched on AIM in 2021.

Things really started to kick off on June 19 when Boohoo issued an explosive statement to the London Stock Exchange.

Boohoo revealed that it intended to vote against the reappointment of Revolution Beauty's chief executive, chief financial officer and chairman at its annual general meeting (AGM) on June 27.

The fashion giant wanted the removal of Bob Holt, Elizabeth Lake and Derek Zissman from Revolution Beauty's board and to appoint two of its non-executive directors, Alistair McGeorge and Neil Catto, to become its chairman and CFO respectively.

Boohoo also requested that Revolution Beauty did not proceed to appoint Rachel Maguire and Matthew Eatough as directors.

A few days later, Boohoo also revealed it wanted to appoint a former chief executive of a major division at THG to Revolution Beauty's board.

In response, Revolution Beauty branded Boohoo's attempt to take control of the company as "value-destructive, opportunistic and self-serving".

It added that the fashion giant's move is "not being in the interests of the company's shareholders as a whole".