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Ibrox shareholders left in limbo

Easdales in legal threat after Rangers forced to quit market

Easdales at IbroxRangers’ former directors Sandy and James Easdale have threatened legal action against the board after the club was forced to resign its stock exchange listing.

The board announced the decision yesterday after the firm it hoped to sign up as a new nominated adviser – believed to be Cantor Fitzgerald – declined to accept the appointment.

Following the statement, a spokesman for the Easdales said: “I can confirm that the Easdale grouping is considering legal action. This cessation of listing is a blow to all serious shareholders and is in direct contradiction to the promises Mr Dave King made in the lead up to the EGM regarding appointment of a nomad.

“Today’s statement from Rangers is a masterpiece in obfuscation, presumably with the intention of disguising the fact that the shares will trade at a massive discount.”

The club said it was forced to resign from the London Stock Exchange’s Alternative Investment Market after the new board failed to find an adviser willing to take on the task of maintaining its listing.

After the resignation of WH Ireland on 4 March, the club had until today to find a replacement, but was forced to admit that the firm it had lined up has declined the offer because of the “difficulties” that have been encountered in recent months.

Shareholders are now left uncertain as to what will happen to their holdings and how transparency in the club’s affairs will be maintained unless it can sign up to another exchange.

Th club said in a statement that “there is no reason why delisting should adversely impact on the value of the company’s shares or on the company’s financial condition or prospects.”

In a hint that it might prefer to remain off the market, it added: “Indeed, we set out… a number of reasons why delisting may improve the company’s financial performance, delivering additional value to shareholders. Nor does the cessation of listing on AIM prevent shareholders transferring shares to each other privately. What it does effect is the ability of shareholders to transfer shares on a public platform.”

The club said it is considering the option of an alternative trading facility including admission to ISDX, the successor to the Plus platform (where The Rangers Football Club plc’s shares were traded in the past) which offers a quotes-driven market for shares. The shares of Arsenal FC are listed on ISDX.  

Discussions are said to be “proceeding positively” and the club said today it “anticipates reaching a decision and commencing arrangements for a listing over the next few weeks.”

In the meantime, the company has put in place arrangements to allow shareholders access to a matched bargain trading facility with JP Jenkins which was a founding member of the AIM and Ofex markets (where Rangers shares were previously traded).

JP Jenkins already has a football connection, as Millwall FC’s shares are traded through its facility.

In its statement, the club said: “We recognise that a number of shareholders value the benefits of an AIM listing. That is why the board put so much effort into the appointment of a new nomad (nominated adviser). We regret that, because of the past actions of those with control of the company, this has not been possible but would hope that the vast majority of shareholders will have their requirements satisfied by the trading platforms that the company will offer.”

However, despite the apparent commitment to remaining on the AIM (technically companies are not listed on Aim, they are admitted), there remains a possibility that the club would be happy to become a private business.

It states: “We also believe that there are significant benefits to the company of not being listed on AIM. These include the removal of the disproportionate amount of  senior management time spent on maintaining the listing, (and) the saving of significant professional fees associated with the admission (legal, accounting, LSE and nominated adviser).

“Crucially, it is the board’s view that the company’s future capital requirements can be met by shareholders who are not concerned about the absence of an AIM listing‎.‎

Shareholders who wish to buy or sell ordinary shares in the company through JP Jenkins must do so via a stockbroker; JP Jenkins is unable to deal directly with members of the public.

The failure to find a replacement adviser came down to the “fit and proper” status of the board seeking to make the appointment and the reputational and historical issues surrounding the club.

The prospective nomad completed its checks on the “fit and proper” status of the existing and the proposed additional director – believed to be Dave King – of the company “and confirmed to the company that it was satisfied on both fronts”, said the statement.

“It then carried out its own assessment of the company’s profile over the last several years and the issues which had been encountered. We understand this process involved discussions with the Exchange. We were advised that, following this process, the prospective Nomad was unable to take up appointment.

“We also understand that any alternative Nomad is liable to encounter similar difficulties and therefore the company requires to terminate its listing on AIM. This is no reflection on the current board or on the financial condition or prospects of the company. It is simply the result of the well documented failings in corporate governance and management of those who previously controlled the company.

“The company understands that this resulted in AIM receiving more complaints about the company than any other company on its Exchange over the last year. We appreciate and understand the difficulties this presented for AIM.”

Picture: James and Sandy Easdale (Sky Sports)

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