Somers resigns as chairman ahead of EGM
King ready to be crowned at Ibrox, but battle with Ashley goes on
Dave King, the South Africa based businessman, now looks certain to be thrown into a showdown with fellow shareholder Mike Ashley after Ibrox chairman David Somers became the latest director to resign ahead of this week’s EGM.
Mr King needs 51% of shareholders to back his bid to oust the board and seize control, and with Somers following James Easdale out of the directors box, his position has been substantially strengthened.
In a statement issued this morning, Mr Somers said: “I have resigned as Chairman of Rangers International Football club plc. I have worked in the City of London, the world’s greatest financial centre for decades and enjoyed considerable success. When I was approached about the Chairmanship of Rangers, friends warned me that the world of football has different rules and codes of behaviour.
“I now know that is a gross understatement. I am a non-confrontational man and have always tried to bring harmony to boardrooms and with stakeholders. At the risk of antagonising my army of critics I would point out that Rangers managed to pay its bills and avoid going under during my tenure. These critics might not agree with how we achieved this.
“I look forward to alternative solutions from whoever is running the club in the future. Despite the personal attacks on me from various sources I genuinely wish the club the very best in the future and I am confident that with such a passionate and vociferous fan base they will be restored to their former glories.”
The position of chief executive Derek Llambias and finance director Barry Leach was unclear, but as allies of 8.92% shareholder Mike Ashley they are now facing the prospect of being voted off the board at Friday’s meeting at Ibrox leaving the Sports Direct tycoon to fight over control of Ibrox with King.
While Mr Ashley is unable to increase the 8.92% stake held by his MASH Holdings, he does have rights over certain key assets at the club.
Sports Direct has an agreement with Rangers over selling merchandise and has lent the parent club, Rangers International, and has given the club two loans amounting to £10 million which came at a high cost. They are secured against Murray Park training ground, Edmiston House and the Albion car park.
Sports Direct also gets security over Rangers ‘brand trademarks, and a ‘floating charge’ over some of its other assets, which essentially gives it the right to cherry pick the asset it wants if the club defaults.
Rangers also added an additional 26% stake in their merchandising joint venture, RRL, which is now 75% controlled by Sports Direct. It will get the proceeds from shirt sponsorship from 2017-18 onwards, while the loan lasts.
Winning Friday’s vote, therefore, may only be the start of a long process of securing control of Ibrox. King believes he can already count on achieving the required majority, having won support from other key shareholder groups including the 19.49% held by Three Bears, Douglas Park, George Letham and George Taylor, together with other key supporters’ holdings and minority stakeholders.
James Easdale’s brother Sandy, chairman of the football club, owns 6.45% and proxy votes for a further 19.67%, which includes the shares held by Blue Pitch and Margarita Holdings. But even with Ashley’s support he will struggle to garner enough to fend off King.
If King wins he is certain to reject any further offers of support from Ashley, and thereby nullify the opportunity for Sports Direct to elect its two directors.
But Ashley will remain a key shareholder and asset holder which will require the club to deal with him accordingly.