LONDON (Alliance News) - The takeover saga for Rangers International Football Club PLC continued Monday after the club rejected an increased proposal from American financier Robert Sarver, repeating its reason for rebuffing the first bid that it would be unable to secure sufficient shareholder support for the offer.
Rangers said the bid from Sarver, the owner of NBA franchise the Phoenix Suns, which was increased to GBP20 million from an original GBP18 million offer, had been rejected as, following talks with shareholders, the board does not believe the bid would secure the necessary 75% support from shareholders. Therefore, it said it would not seek to convene a general meeting to vote on the proposal.
The revised bid from Sarver would have involved investing up to GBP20 million in Rangers by way of a share placing of 100 million shares at 20 pence per share, giving Sarver about a 55% stake. If the placing were to be completed, Sarver would have then bid for the rest of the company's shares.
As part of the second proposal, Sarver would have made GBP6.5 million in funding available to Rangers by way of a secured loan to be repaid in 90 days or via the proceeds from the placing.
Rangers is currently the subject of a tug-of-war between Sarver and Sports Direct International PLC founder Mike Ashley, who has been steadily increasing his influence over the club but who faces hurdles in securing any deal due to his existing ownership of Newcastle United FC. Under Scottish football rules, no club owner can be involved in the administration of another.
Despite those rules, Ashley's influence at the top of the club is now significant, with Derek Llambias, the former managing director of Newcastle United and a long-time associate of Ashley, appointed chief executive and Barry Leach, the head of brands at Sports Direct, recently made finance director.
Prior to those appointments, Ashley's MASH Holdings Ltd investment vehicle had already successfully removed former Rangers CEO Graham Wallace and Executive Director Philip Nash from their positions. The pair were removed as part of the conditions for MASH to provide a GBP3 million credit facility to the club, which included giving the vehicle the right to appoint two directors to the board. The loan effectively gave Ashley control of the club.
In addition to the appointments already made, speculation surfaced last week that Ashley may still have further board appointments to make in addition to Llambias and Leach. A report in the Daily Record, citing club insiders, said that if this proves true, it may put-off a potential buyer owing to the possibility Ashley could further increase his influence over the board.
The same paper today, however, claimed a consortium of investors in the club, known as the Three Bears, are on the brink of agreeing a deal to pump GBP6 million into the club in return for two seats on the board.
The Three Bears, comprising Douglas Park, George Taylor and George Letham, have built up a holding of around 19.5% in the club after acquiring a stake from Laxey Partners. When selling the shareholding to the trio, Laxey head Colin Kingsnorth said he was selling up in order to block any potential takeover of the club by Ashley.
Ashley's attempt to increase his stake in Rangers to 29.9%, from its current level of just under 9%, was blocked by the Scottish Football Association and he is due to face a disciplinary hearing on January 27 over the issue. But prior to the rejection, a report in the Daily Telegraph claimed Ashley could still take control of Rangers if given dispensation to do so by the SFA, meaning a formal takeover of the club is still potentially on the table.
Rangers shares were up 3.7% to 26.45 pence on Monday.
By Sam Unsted; samunsted@alliancenews.com; @SamUAtAlliance
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