The tussle for control of Rangers football club has become a tangle. ‘White knight’ American investor Robert Sarver has now offered £20m for a majority stake in the club, after his earlier £18m offer was spurned on Tuesday for being too small.
Sarver, a financier who’s owned the Phoenix Suns basketball club since 2004, made the initial offer after Christmas, after his sons’ football coach and former Rangers player Davie Robertson brought the club’s struggles to his attention.
Sarver’s new offer, which includes a £6.5m short term loan that could help the club plug its financial leaks, puts him in direct competition with Mike Ashley, who effectively took control of the club’s board late last year.
It is no two-way scrap, however. Opposition to Ashley has been vehement both among fans and shareholders. On December 31st, major investors Laxey Partners sold 16% of Rangers to a consortium of businessmen and Rangers supporters known as the Three Bears: George Taylor, George Letham and Douglas Park.
Laxey chief Colin Kingsnorth even went as far as to say that he sold to the Three Bears ‘because a fans-based group were hopefully going to be the best placed to take on Ashley's power’.
Two days after that, Dave King, who’s opposed Ashley in Glasgow previously, bought 15%, creating a voting bloc that equals the voting alliance between chairman Sandy Easdale, who controls a quarter of the shares, and Ashley, who only controls 9%, but whose allies Derek Llambias and Barry Leach are already on the board.
Sarver’s new offer would require 75% shareholder approval, something that won’t happen without the support of either Easdale or the Three Bears and King. Unless they are willing to make an alliance, it seems unlikely that Ashley’s influence over the board – and the lucrative deals between the club and Sports Direct – will be much diminished.
Indeed, there are rumours that Ashley might actually be able to appoint two more board members under the terms of his loans to the club (it had been assumed Llambias and Leach were those two). Unsurprisingly, he also continues to be the lender of first resort to the club, which told the stock market on Tuesday it needs more external funding before the end of January.
Ashley’s leverage will remain until Rangers turns the corner financially or gets its funding from elsewhere. Even if he does retain control, however, Ashley’s victory might turn out to be pyrrhic – how many of those irate Rangers fans will be queuing up to buy shirts from Sports Direct now?