Mur­ray takes on man­tle of bona fide Blue Knight

Tick­e­tus back­ing could be a de­ci­sive fac­tor in con­sor­tium’s at­tempt to gain con­trol of the Ibrox

The Herald - Herald Sport - - Rangers In Administration - Richard.wil­son@her­al­dand­times.co.uk

EVENTS at Rangers have un­folded at such speed dur­ing the past four days that the pre­dom­i­nant mood among the fans has been be­wil­der­ment. The flood of claims and rev­e­la­tions has gen­er­ated a sense of dis­or­der, but there was an un­der­ly­ing de­vel­op­ment that was clear enough: this was the week when Paul Mur­ray be­gan in earnest his move to buy the club.

As the head of the Blue Knights con­sor­tium, Mur­ray has po­si­tioned him­self at the front of what is cur­rently thought to be a small list of se­ri­ous bid­ders. Brian Kennedy, the owner of Sale Sharks, is be­lieved to have held meet­ings with the ad­min­is­tra­tors, but in­tends to step aside in favour of the Blue Knights bid. De­spite re­ported in­ter­est from Amer­ica, the only other party con­sid­ered a se­ri­ous po­ten­tial can­di­date is from Sin­ga­pore, but has yet to pro­vide proof of fund­ing. All groups have un­til Fri­day to make an in­dica­tive of­fer, but Mur­ray has al­ready started to pre­pare the ground­work.

He met Her Majesty’s Rev­enue and Cus­toms of­fi­cials on Tues­day, when the po­ten­tial out­come of the first-tier tax tri­bunal into the club’s use of Em­ployee Ben­e­fits Trusts un­der Sir David Mur­ray will have been dis­cussed. The fol­low­ing morn­ing, Dave King, Rangers’ sec­ond­biggest share­holder, an­nounced his in­ten­tion to sue Sir David Mur­ray and to back the Blue Knights. Hours later, dur­ing a ra­dio in­ter­view, Paul Mur­ray de­clared his in­ten­tion to make a con­di­tional of­fer.

The an­nounce­ments could still have been seen as pos­tur­ing, but the rev­e­la­tion yes­ter­day that Mur­ray has the back­ing of Tick­e­tus has the ap­pear­ance of a piv­otal mo­ment. The de­tails of their ar­range­ment will be cru­cial, but it could be con­sid­ered a de­ci­sive move by Mur­ray. If Tick­e­tus were con­sid­ered to be owed money by Rangers, then their agree­ment with Mur­ray re­moves them from the list of cred­i­tors who will need to vote in favour of a com­pany vol­un­tary ar­range­ment, which would al­low the club to move out of ad­min­is­tra­tion con­ven­tion­ally. Mur­ray would also have in­creased the amount that the other cred­i­tors would re­ceive. The only po­ten­tial dif­fi­culty would be if the other cred­i­tors be­lieve Tick­e­tus are be­ing favoured by re­ceiv­ing 100p in the £1 of their debt over time, while the CVA of­fers them only a re­duced amount.

“If the other cred­i­tors be­lieve Tick­e­tus are be­ing treated pref­er­en­tially, then that might cause a le­gal chal­lenge,” said a fi­nan­cial source. “But if Craig Whyte is say­ing, ‘I’ll give you my shares if these guys stop chas­ing me for the money’, you can see how it all hangs.”

The de­tails of Tick­e­tus’s deal with Mur­ray are not con­firmed, but it is un­der­stood the com­pany will ac­cept be­ing paid a share of prof­its made on sea­son ticket sales to re­coup the £18m that Whyte used to pay off Lloyds. Their orig­i­nal agree­ment with Whyte, who bor­rowed a to­tal of £24.4m from them, in­volved re­pay­ments of £8m over three years, but the new ar­range­ment is likely to be for a smaller amount over a greater num­ber of years, es­sen­tially a term loan.

Tick­e­tus could then pur­sue Whyte for the bal­ance of £6m, but could choose to write that off be­cause the lit­i­ga­tion would be costly and time con­sum­ing. If Tick­e­tus are not cred­i­tors of Rangers, the deal still makes sense for them be­cause they will re­coup most of the money they lent to Whyte with­out hav­ing to legally chal­lenge him.

The ben­e­fit for Tick­e­tus of back­ing the Blue Knights is that they will re­ceive prof­its to cover the loss of their pre­vi­ous ar­range­ment with Whyte, and re­main in a com­mer­cial re­la­tion­ship with Rangers; in some ways be­com­ing the club’s bank. For Mur­ray, the deal ei­ther re­moves a po­ten­tial cred­i­tor, or plays a part in mov­ing Whyte out of the way. Any pur­chase in con­junc­tion with a CVA re­quires Whyte to agree to sell or pass on his ma­jor­ity share­hold­ing. Whyte claimed to be per­son­ally li­able to Tick­e­tus for the £24m loan, but if that is no longer the case then he could walk away from the club with no fu­ture li­a­bil­i­ties or court ac­tions. In re­turn, he might be will­ing to pass on the share­hold­ing he bought for £1, al­low­ing the Blue Knights to use their money to fund a CVA while also tak­ing con­trol of the club.

It has of­ten been the case that the sale of foot­ball clubs at­tract pub­lic­i­ty­seek­ers, and the ul­ti­mate buyer emerges only when they are ready to fi­nalise the deal. A stalk­ing bid­der may still ex­ist around Rangers, but Mur­ray seems a de­ter­mined buyer. As a life­long Rangers fan, a for­mer di­rec­tor, and a part­ner with sup­port­ers groups in the Blue Knights con­sor­tium he also fits the bill of some­body not look­ing to profit from the deal but who has the club’s in­ter­ests at heart.

“It needs to be an emo­tional in­vest­ment for Rangers,” said Neil Patey, a part­ner with Ernst & Young who has been in­volved in six foot­ball club takeovers, in­clud­ing Chelsea and Liver­pool. “The Old Firm have some sort of global brand, but with the best will in the world, you’re not go­ing to be­come a rich man by ex­ploit­ing that. What­ever you buy it at to­day, you are in­her­it­ing a club that is mak­ing a loss. So you’re ei­ther fund­ing that loss or you’re hav­ing to re­struc­ture it.”

Mur­ray might want to po­si­tion him­self as the club’s saviour, but that alone will not be enough to se­cure any deal. Ul­ti­mately, the ad­min­is­tra­tors will sell to the high­est bid­der, since that gen­er­ates the best re­turn for the cred­i­tors. The dra­mas are only be­gin­ning.

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