By Paul Nicholson
January 23 – The pressure on Scottish club Rangers’ board to call an extraordinary general meeting is mounting, despite the board’s resistance to convene shareholders for a vote that would determine whether they maintained their positions or not.
With fans and a growing body of shareholders demanding Mike Ashley’s influence at the club is removed, the battle for control is now entering a crucial phase. An online petition calling for W H Ireland, the club’s nominated advisors, to do their “legislative & fiduciary duty” and call an egm has been signed by over 6,000 fans. Private and institutional shareholders are similarly pressuring for an egm.
Alongside this the financial pressure on Rangers is building to a crescendo with the club having said it cannot meet wages at the end of this month unless new finance is secured. Money has been offered by Ashley and a separate group of investors (known as the three bears), but there is no such thing as free money and both offers come with conditions.
The offer from 8.9% shareholder Ashley (owner of Newcastle United in England) is for £10 million and would need to be secured against the Ibrox Stadium. The other, for £5 million (and perhaps more if required), is from Douglas Park, George Letham and George Taylor (the bears), who own about 20% of Rangers. The offer doesn’t require the stadium as security but does require two seats on the board. The board has recently turned down a £20 million offer from a US investor for the club.
Separately, 15% shareholder Dave King lodged paperwork at the end of last week calling for a general meeting and a vote to oust four board members – David Somers, Derek Llambias, Barry Leach and James Easdale – and the appointment of himself and associates Paul Murray and John Gilligan to the board. Llambias and Leach are close business associates of Mike Ashley.
Earlier this week in a scramble to shore up voting blocks Rangers chairman Sandy Easdale, who controls about 6.5% of the shares and holds voting rights over 26.1% purchased a block of 1,014,000 shares, believed to be from one of the proxies he holds who was showing signs of wavering support.
The opposing groups to the board are vehement in their campaign to have Ashley’s involvement in the club reduced, if not ended all together. They are supported by a vocal and united fan group that has actively been gathering proxy votes from smaller shareholders in anticipation of an egm and a vote.
Current estimates on the way the vote would go would see the anti-board faction as victors. 51% is the crucial number to remove the board with the anti-board lobby reckoned to now hold about 56%.
But Ashley’s control of the merchandising operations through his Sports Direct company, and the existing loans he has made of £3 million are not so easily removed – unless someone comes up with the cash to pay him out. Either way, it is hard to see Ashley coming out a loser in the vote. But it seems increasingly likely the fans revolt will mean the investor from over the border with England will lose his significant influence over the club.
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