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Three Bears blast Mike Ashley deal and tell Rangers board: Our offer was way better

Jan 27, 2015 17:56 By Gary Ralston

DOUGLAS PARK group up the ante on Sports Direct tycoon who has got the lot in Rangers power grab.

THE Three Bears have tonight hit out at the decision to go with Mike Ashley’s millions after they refused to protect James Easdale on the Rangers board.


Ibrox directors have attracted scorn and derision from fans after handing everything but the stadium to the Sports Direct tycoon for a paltry £2million.


The offer of two tranches of £5m from the Newcastle United owner has been accepted over a rescue package from George Letham, George Taylor and Douglas Park totalling £10m.


However, Ashley’s first £5m will only secure staff salaries for January and February as £3m will be used to pay off the loans he gave the club in October and November.


It’s believed a reason behind the board’s decision to go with Ashley was the refusal of the Three Bears to back Easdale, a placeman for shadowy investors such as Blue Pitch and Margarita Holdings.


A Three Bears spokesman said: “We feel it important to make the fans aware of details of our funding offer in order that they can make up their minds as to which would have been the best financial arrangement for the club.


“Our main aim was to make short-term funding available to the club to ensure an insolvency event would be avoided.


“In addition, we wanted to make certain new equity was invested in the club rather than large loans which will need to be repaid in the future.


“Our final offer to the board was for a facility totalling £6.5m. A £4.5m tranche of the facility could be converted to equity at a future share issue (which we would partially underwrite).


“To the extent this was not converted to equity it would remain available to the club as a loan for two years at an interest rate of 2%.


“A £2m tranche of the facility was for short-term working capital purposes to be repaid in 12 months and interest free. In total, £1m of this tranche was available unsecured until the current notice relating to Murray Park expired.


“It was a condition of our facility the £3m MASH loan be repaid and that security be given to us over Murray Park, Edmiston House and Albion.


“Our request for a negative pledge on Ibrox to prevent it being used by anyone else as security was not accepted.


“At one stage during the negotiations we indicated we could increase our funding package to £10m to match the Sport’s Direct facility and indeed provided proof of funds in excess of this amount.


“However, after the EGM was called we felt that agreeing an excessive long term loan package with a board who may be removed in six weeks was not appropriate.



“We were subsequently advised by Derek Llambias that our funding offer would be difficult for the board to accept if we did not provide irrevocable undertakings to vote against EGM resolutions to remove certain existing board members. We felt this was completely inappropriate.”


Ashley has now been granted security over Murray Park, the Albion Car Park, Edmiston House and the copyright of the club’s trademarks, including the badge.


He has also negotiated an additional 26 per cent in Rangers Retail Limited, taking Sports Direct’s total stake in the subsidiary company to 75 per cent.


He now holds complete authority on the club’s retail department and is free to renegotiate existing contracts, already weighed heavily in the favour of Sports Direct.


Rangers Retail Limited will also benefit from the sale of shirt sponsorship from season 2017/2018 and a dividend of around £800,000 Rangers were due from their current deal will be repaid to Sports Direct to cover the cost of closing unprofitable club shops.


Ashley has also set aside an additional £5m in loans which, if the status quo remains, will be drawn down by the spring, possibly even using the stadium as security.


Fan hopes are now pinned on Dave King leading a shareholder revolt at a general meeting he demanded almost two weeks ago, when the existing board can be overthrown and the loans to Ashley re-paid.



Rangers fans protest outside Ibrox stadium



However, the long term security of the club remains in the balance as 75 per cent shareholder approval is needed to open up a wider share issue - and that is likely to be blocked by the Easdales’ 26 per cent proxy shareholding.


The Three Bears spokesman added: “The announcement from the board suggests the Sports Direct facility is interest free, but the loss of revenue to the club from the transfer of 26 per cent of the share capital in RRL and 50% of the shirt sponsorship proceeds from 2017/18 equates to an annual interest rate significantly higher than our offer and probably in double digits.


“Security for the Sports Direct facility involves the club’s registered trademarks and a floating charge over the club’s assets. This is disadvantageous to the club compared to the security required under our offer.


“It appears the only measure by which the Sports Direct facility could be considered favourable to our offer is in respect of the quantum and duration of the second tranche of £5m, but there appears to be some uncertainty as to whether this will actually be required and it is subject to further due diligence by Sports Direct.


“We fail to see how the Sports Direct facility can be described as better for the club than the funding offer we made.


“It isn’t and should not have been accepted if the best interests of all the shareholders were considered.


“Acceptance of the Sports Direct facility will do nothing to repair relationships with the fans which is critical in improving the revenue streams of the club.”


The claim from chairman David Somers the Ashley deal is good for the club and will help Rangers return to domestic and European strength has been ridiculed by Union of Fans spokesman Chris Graham.


Somers said: “It is a great deal. I’m really pleased to get some money into the club.


“It is just over 12 months since I became chairman and I had three goals. One was to make sure this great club never, ever goes into administration.


“The second one - there was no money when I joined the club so I wanted to get some money into the club. This deal really moves us a long way to getting some decent money into this club.


“The third goal was all about the football. We’ve got to get this club into the Premiership, into the Champions League and this sort of money will really help us do that.”

Edited by BEARGER
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“We were subsequently advised by Derek Llambias that our funding offer would be difficult for the board to accept if we did not provide irrevocable undertakings to vote against EGM resolutions to remove certain existing board members.”


Aahahahaha..... is what I imagine there response was to Derek's proposal. Comedy gold Mr Llambias.

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