The UK's takeover watchdog has launched unprecedented court action against Rangers chairman Dave King to force him to make an £11 million (€12.9 million) bid for the football club, opening a new chapter in the often bizarre legal woes that have beset the Glasgow club in recent years.
The takeover panel, which regulates deals in the UK, said that it had started proceedings in Edinburgh after Mr King, who holds a stake in the club, ignored an order to make an offer for the rest of the shares of the football club, despite the company no longer being publicly listed. It is the first time since the panel was granted enforcement powers more than a decade ago that it has taken such action.
The panel had previously ruled that Mr King had acted in concert with wealthy fans George Letham, George Taylor and Douglas Park – dubbed the "Three Bears" in a reference to the club nickname the "Teddy Bears" – to acquire more than 30 per cent of voting rights in Rangers in late 2014.
Under UK rules, any group of shareholders that builds up a 30 per cent stake in a public company has to make a cash offer to buy the rest of the shares at the highest price they have paid over the past 12 months – in Mr King’s case, 20p a share.
Disagreed with ruling
The Rangers chairman did not immediately respond to a request for comment, but he said last month that he could not agree with the panel ruling, “nor follow its logic”. At that time, he added that he did not believe there was a substantial group of shareholders that would accept an offer at the price set by the panel.
Rangers, one of the world’s best-known football clubs and a major social institution in Glasgow, has been at the centre of a maelstrom of legal dispute and corporate machinations since before it fell into administration in 2012.
Many fans had hoped that Rangers was set for a period of relative calm after Mr King wrested control of the club from retail entrepreneur Mike Ashley in 2015. Mr Ashley retains a 9 per cent stake.
Nick Rumsby, corporate partner at law firm Linklaters, said the panel's actions, while unusual, were "entirely appropriate" to ensure all shareholders were treated fairly when a company changed hands. "The rules are clear and require an offer to be made if there has been a change of control," he added.
Katherine Moir, mergers and acquisitions partner at Clifford Chance, another law firm, added that the ruling showed that the panel was willing to flex its muscles where there was a direct challenge to its integrity as a regulatory body.
“The panel is usually able to rely on the reputational impact of its public censure regime and other traditional sanctions, but the initiation of these proceedings demonstrates that it will take further action where necessary to enforce its decisions,” she said.
Rangers declined to comment.
- Copyright The Financial Times Limited 2017
