RANGERS administrators Duff & Phelps hope to be able to sell the club next week, having announced that they had received four “best and final bids” by the close of business yesterday.
Three of the bids came from parties previously known to be interested in the troubled Ibrox club: the Blue Knights consortium, an American group, and a Singapore-based consortium. The other offer has been tabled by a hitherto-unpublicised German company.
Duff & Phelps will spend the next few days analysing the bids and seeking any clarification required from the interested parties. They then intend to identify a preferred bidder and agree a sale – although a period of due diligence will follow as the would-be purchaser assesses the state of the business before finally deciding whether to proceed.
Due diligence never lasts for a specific length of time, but Duff & Phelps nonetheless hope that the club can exit administration by the end of the season. They have now been in it for almost eight weeks, even though Rangers owner Craig Whyte claimed in February that it could be a swift process which from start to finish could be over in a month.
Joint administrator David Whitehouse issued a statement last night confirming the number of bids and offering a sketchy outline of what he and colleague Paul Clark expect to happen next. “Following our announcement on 30 March, that best and final bids for control of Rangers Football Club should be submitted by 5 April, I can confirm we have received four bids by close of business today,” Whitehouse said.
“The bids are structured in various ways, but I would describe them as positive and constructive. The administration team will now analyse these bids over the forthcoming days and hold discussions with relevant parties to gain further understanding of the details of their bids.
“It will be our intention to accept an offer next week and this will be followed by a period of due diligence and exclusivity. At this stage, we cannot be precise in timescale, but estimate that an exit from administration before the end of the season is achievable.
“We appreciate the need to conclude this process as quickly as possible. It is, however, most important to secure the best possible outcome for creditors, Rangers Football Club and its supporters.”
Paul Murray’s Blue Knights group has been by far the most open concerning its intentions for the club after any successful takeover. Former Rangers director Murray wants creditors to agree a Company Voluntary Arrangement (CVA) as the best way of getting out of administration swiftly and cleanly. The Blue Knights are also the only bidders to have received substantial support from Rangers supporters.
The American bid has been made by the remaining elements of the consortium which previously included Club 9 Sports of Chicago. Club 9 released a statement on Tuesday to say that, contrary to previous reports, they were not bidding for Rangers. Their withdrawal has not prevented their previous partners from maintaining an interest, but it remains to be seen if it has weakened the financial strength of the American bid.
The Singapore group has been assisted in tabling its bid by Glasgow-based businessman Shazad Bakhsh, whose Bakhsh Group has interests in education, printing, property and transport. The bid is thought to be fronted by wealthy businessman Bill Ng.
The German company which tabled the surprise bid has had not so much a low profile as a nonexistent one since the takeover saga began shortly after Whyte put the club into administration on Valentine’s Day. Duff & Phelps refused to divulge any information on its bid yesterday, other than to include it in that general assessment that all four are “positive and constructive”.
The quartet of bidders must now await the next step from the administrators, but will be conscious that there are three factors which could complicate the picture. Those factors are Whyte, Brian Kennedy and the impending outcome of the so-called big tax case between Rangers and Her Majesty’s Revenue & Customs (HMRC).
Duff & Phelps have insisted that Whyte has no part to play in Rangers in the medium to long term, and there have been contradictory statements elsewhere about the businessman’s willingness to co-operate with any new buyer for the sake of the club.
Until he completes the sale of his majority shareholding, however, Whyte remains a major player. If he chooses to hold on to those shares, which he bought last year from Sir David Murray, there is no apparent legal mechanism to prise them from his grasp, no matter how many detractors he has who believe he has long since forfeited any moral right to have a say in the running of the club.
Kennedy, who owns Sale Sharks rugby club, is not yet a major player, having had his initial bid rejected by Duff & Phelps. But he has said he will come back into the market if Murray’s bid is rejected and the only alternative would be to liquidate the club and start all over again with a new company.
And the big tax case, which has the potential to land Rangers with a bill for £49 million, could throw the whole process up into the air again. Even under a CVA which offered just a few pence in the pound, potential owners might find the burden of a massive tax bill too much to bear.
Conversely, if the tax tribunal finds in favour of Rangers, a significant weight would have been lifted off the club. An announcement from the tribunal is expected soon, but the longer it takes, the more potential bidders will have to hedge their offers with hefty caveats.
The tribunal, which sat in January, has to decide whether Rangers owe tax based on their use of Employee Benefit Trusts (EBTs) dating back around a decade. Having taking legal advice before the tribunal sat in Edinburgh, Rangers have always expressed their confidence that the tribunal would find in their favour. For their part, HMRC believe they have a strong case.