“I cannot see either King or NOAL making an offer as there would be a stampede to accept 20p because the shares are not worth that.” David Low
I rarely venture into the dark underbelly of social media where Rangers Lite fans gather under poisoned toadstools to spit FTP invective at passers-by. However a comment on Follow Follow that King’s failed appeal was a ‘result‘ truly astonished me. Dear oh Dear Dingwall. Go easy on the make-up as the concomitant removal agents must be alcohol based. Given that you apply your make-up with a trowel -age is such a cruel Gay mistress – your bedtime preparations must be akin to binge drinking. After a night at Delmonicas Dingwall likes nothing more than to slip into something comfortable, but as the estimable doyenne of The Ibrox Pink Pound surely he cannot countenance his forum engaging in high farce. A village idiots’ AGM if you will.
When the Takeover and Mergers Commission ordered King to make an offer for the shares out with the concert party’s purview, he appealed it. His appeal failed.
When Lord Bannatyne added legal bite to The City Watchdog’s bark, he appealed it. His appeal was a not upheld.
If this was King’s desired endgame why engage in appeals and pay through the nose for Baron Davidson of Glen Clova doing a passable impersonation of St. Jude, the patron saint of lost causes? Does one need to possess the sentient faculties of an amoeba to be a Real Rangers Man?
Putting £11m in an escrow account and another £1m or so in a prospectus is not good news in anyone’s book. Does King have this quantum? Probably. Will he step up and do the right thing? Not bloody likely.
Letham warned King that he and his ursine chums had acquired 19.3% and that he should only buy 10% from Artemis. But King did not want Taylor to be the big swinging dick and went balls out on 14.57%. This was a ‘result’ as Laxey Partners refused point blank to deal with the career criminal. Colin Kingsnorth was minded to physically throw him out kicking his cap after him.
Since King’s illegal concert part putsch, it has been Porno For Pyros at Ibrox.
Anything that could be razed to the ground was duly incinerated. NOMAD, LSE AIM Listing, Fiscal Prudence were all piled onto King’s bonfire of his vanities.
Some social media commentators on rival blogs are seeing wiggle room for King where none exists. They purport that NOAL will decline King’s invitation to pony up and that King will escape Scot free.
Allow me to disabuse them of this ridiculous notion.
1.David Cunningham King bought his shares via Cantor Fitzgerald.
2. David Cunningham King directed his broker to transfer this equity to NOAL.
3. David Cunningham King was found to have acted in concert to acquire a controlling interest in RIFC.
4. David Cunningham King will be in contempt of court if he does not make an offer for the shares out with the concert party’s purview.
King’s pointless appeal was an attempt to buy time. He figured that The Inner House would engage in a leisurely discussion with a written conclusion delivered in the close season. This would have given him enough time to make good on The Bent Brief’s (James Blair) promises to ‘Look after’ those whom had voted for resolution 11 and screw a million or so from The Bent Brief’s Club 1872.
King has only 3 options:
(i) Walk away and defy the highest court in the land.
(ii) Sell his shares and sell NOAL’s £6.7m loan to a factor.
(iii) Raze RIFC to the ground and continue as Chairman of Sevco Scotland Limited, which is trading as The Rangers Football Club Ltd.
As the latter owns the assets, my money’s on (iii).
It was always my intention to release one article from the preceding week every Saturday free-to-air. Furthermore on a Sunday I intend to post ‘my correspondence’ with Edward Bear Esquire and his delightful wife Lady Bear. I trust this unfettered access will assuage my readers as I do my utmost to catch up and issue passwords. I trust everyone now knows that for logistical reasons I can only respond to PayPal messages; and direct messages from those who ventured £20 or more and received my personal message of thanks.
When our site is fully up to speed I will solicit votes as to which article should be published on a Saturday. I have taken the liberty of choosing the aforementioned piece as a preface to a larger article which can be read at leisure. A large malt by a crackling fire would be the ideal setting. As many of my readers are pensioners please do your utmost to keep warm. Spend more on fuel, borrow if necessary, as your winter fuel allowance should soon be coming down the pike. As for sons and daughters one must make the effort to visit one’s parents to ensure that their basic needs are being addressed.
I digress. First some exclusive news. Despite the best efforts of Charles Green and his successors, Sevco 5088 could not be dissolved. There is a party with deep pockets keeping this entity on life support. There is no guarantee that this party consists of the usual suspects, viz Whyte & Earley. If there is a fat lady in the Rangers Lite tragicomedy she may be clearing her throat on a Sevco 5088 stage.
Let’s look at the known ‘knowns.’
Rangers has an issued share capital of 81,478,201 ordinary shares of 1 pence each.
Major Shareholding (3% or above):
Shareholder No of Ordinary Shares held % of issued share capital
New Oasis Asset Limited 11,869,505 14.57%
Club 1872 Shares CIC 8,732,254 10.71%
George Alexander Taylor 7,575,000 9.30%
Alexander Easdale 5,256,110 6.45%
Douglas Park 5,000,000 6.14%
Julian Wolhardt 3,632,500 4.45%
River and Mercantile Asset Management LLP 3,523,059 4.32%
George Letham 3,299,515 4.05%
The Ordinary Shares are freely transferable and no Ordinary Shares are held in treasury.
Currently 8,500,000 of the Company’s Ordinary Shares (c. 10.4%) are subject to restrictions affecting the right to vote the affected shares, the right to receive payments or distributions in respect of the affected shares and the right to transfer the affected shares. The affected shares are those identified in the attached Shareholder Information.
Director shareholding interests are as follows:
Dave King has advised that he, his wife and children are interested in all of the shares held by New Oasis Asset Limited.
John Bennett holds 50,000 ordinary shares
Paul Murray holds 570,000 ordinary shares (560,000 of this via his SIPP)
Should King step up and make an offer of 20p per share who would be first to bite his hand off? I would contend that Blue Pitch Holdings and Margarita would be first in the queue. Any attempt to exclude them from an offer to exit would result in yet another bloody nose for King at the Court of Session. At 20p per pop this represents a £1.7m bath to King. I have it on good authority that Sandy Easdale will also accept King’s largesse. That’s another £1m and change to King.
Here’s the kicker. If one adds their collective holdings of 16.85% to the ‘established concert party holdings’ of 34.06% one breaches the 50% threshold where King would be compelled to make an offer for all shares not in his capetbagging control; including those held by Club 1872.
I highlighted ‘established concert part holdings’ as there can be little doubt that Club 1872 are also acting in concert. The £2 of share capital in the Dim Sum Bank is owned by the bent consigliere James Blair. Blair authorised acquisitions at 27p and rubber stamped paying over the odds for Ashley’s equity. A cynic might conclude that Blair, the RIFC secretary, is conducting a concert for King. Should one anticipate a single release, viz ‘Feed The Bears?‘
JP Jenkins matched bargains have pegged the shares at 27p. This price is what the Dim Sum Bankers are prepared to pay. It bears no relation to any value proposition in the real world.
In the annual accounts to 30 June 2017, the auditors value the fixed assets of Property Plant & Equipment at £42,679,000. Given that £5.53m of this quantum is pledged to Close Asset Finance Ltd, a mere £37,149,000 is unfettered.
When I looked at Intangible Assets such as players, I found the auditors report to be somewhat optimistic. A quick glance at Transfermarkt and deductions for loan players leads to a more prosaic sum of £18.29m.
A more accurate picture is realised by looking at trade receivables, loans and debts. The latter are nudging £20m. If this amount is used to buy equity, the issued shares would increase by 100,000,000.
If one currently owns one per cent of RIFC, one is in possession of 814,782 shares. If one wished to maintained this percentile holding in the enhanced enterprise one would have to own 1,814,782 shares. One’s 1% holding would be diluted to less than half that amount i.e. 0.45%. One’s shareholding would be devalued by 55%.
At the artificial figure of 27p, a fair value for the diluted equity would be 12.5p.
An offer of 20p per share would be irresistible to those with more than fresh air between their ears.
My model is admittedly simplistic. If one took a more forensic look at the inflated value of the fixed assets one could easily arrive at 1p to 5p per share.
Now I don’t expect King to step up. He would have to find a NOMAD to oversee the £11m that he would be required to pony up in an escrow account. A prospectus would not be necessary as the NOMAD acting on King’s behalf could make a Tender Offer. At 20p per share the equity is at a significant premium. With the exception of the Gullibillies, the bent consigliere’s Club 1872 and the ‘financial genius’ (or should that be ingenue) that is Wolhardt, the corporate investors would move quickly to divest themselves of their toxic holding.
I anticipate that King will walk away. Will our ursine friends be plunged into a ‘Cold Shoulder’ when they emerge from hibernation? If they should hold 30% or more in the enhanced enterprise the fat lady will be performing an encore at Paternoster Square. Her ‘Takeover & Mergers Blues‘ might just bring the house down.