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MONTHS after stepping down as Rangers chairman, Dave King made the surprise announcement that he’s planning to sell his shares to fan group Club 1872.
The South Africa-based businessman has a 20.37 per cent stake through his New Oasis Asset Limited, making him the biggest shareholder.
With the fan group already owning close to five per cent, the move would gives Club 1872 a quarter of all the shares.
But what does this mean for the club and for the fans?
IS THIS A STEP CLOSER TO FAN OWNERSHIP?
KING is using ‘Never Again’ as the tagline for this move, with the former chairman expressing his hope fans will never be as isolated from their club as they were before his takeover.
This proposal gives Club 1872 a stake of 25 per cent plus one, meaning the group could veto any plans at boardroom level.
King has also stated his hope that this could eventually lead to supporters having a controlling stake in Rangers.
He said: “In an ideal position I would like to see Club 1872 being the controlling shareholder above 50 per cent. At least negative control is a good place to start.”
Fan ownership is an increasingly popular model in Scottish football, with Hearts leading the way.
Ann Budge took over the club in 2014, pledging to deliver fan ownership via the Foundation.
She handed over her 75.1 per cent stake in February after the Foundation of Hearts repaid a £2.5million loan. So far the group has raised more than £11m from fans and other clubs have looked to follow suit.
Motherwell fan group The Well Society have followed a similar model in taking over Les Hutchison’s 76 per cent stake, while Kilmarnock and St Mirren fans have representation on their respective boards.
Further down the leagues Clyde, Stirling Albion, Annan and Clydebank are all run by their supporters, with Partick Thistle set to follow after Colin Weir gifted his shares to supporters.
Rangers fans are a long way off ownership but this deal would give them a real say in how the club is run, something almost every supporter, no matter their hue, would welcome for their team.
WHAT NEEDS TO HAPPEN FOR THIS TO GO THROUGH?
THIS isn’t a done deal for Club 1872, although supporters of the group strongly believe they will pull it off.
The organisation has three years to buy out King, and if they can do so within the next 12 months they’ll be able to purchase the entire stake for 20p per share.
That would be a loss for the former chairman who bought them at 23p. As a result Club 1872 need to raise just over £13m to buy out the South Africa-based businessman.
They plan to sign up 20,000 legacy members to raise the money, with those members then having a lifetime vote on the shares.
Club 1872 would become the largest shareholder if the deal is completed, with the option to take part in any future share issues to avoid the stake being diluted. It could be a real game-changer.
WHAT DOES THIS MEAN FOR DAVE KING?
WHETHER in 12 months or three years, King would no longer have any stake in Rangers.
He would pocket £13m from selling his shares but if they’re sold at the 20p rate before December 2021 he would make a loss – by his calculation £2m.
King could still draw interest from a loan he gave the club but he’d have no control over the running of things at Ibrox.
He would leave as he first joined – a hero in the eyes of Rangers fans, having emancipated the club from the hated previous board and by his estimation ploughed in £40m.
King spoke of leaving a “final legacy” by making fans the biggest shareholders.
ARE THERE ANY CRITICISMS OF THE DEAL?
CRITICS have pointed out that the money raised by Club 1872 won’t go to the club – it will go to King to buy out his stake.
It has been suggested that fans could have raised the required £13m themselves to buy up shares, which would still give them a negative controlling stake and hand Rangers money to use as working capital.
Some have stated King could have gifted his shareholding to supporters, or at least given Club 1872 a proxy vote while they buy him out. But by his own admission he has already bankrolled Rangers to the tune of £40m, so this would perhaps be an act of philanthropy too far.
For his part the former chairman said: “It’s an asset, I have invested the money in the club and I am happy not to make a return. But I don’t think gifting them is appropriate. I have put in a lot of time, money and effort and it’s not unreasonable that I at least cover my costs.”
In addition, the deal gives Club 1872 the right to participate in any future share issues.
However, if the fan group does not have the funding to participate it would see its stake diluted – potentially losing the 25 plus one per cent veto.