Rangers shares up and running

Trading begins in Rangers shares on AIM stock market. Picture: Robert Perry
Trading begins in Rangers shares on AIM stock market. Picture: Robert Perry
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RANGERS hit the ground running in their flotation on the stock market yesterday, with the newly issued shares climbing strongly as institutional 
and private investors both ploughed in.

The stock closed at 76p, a jump of more than 8 per cent on its 70p listing price on London’s junior AIM market, suggesting investors had been won over by Rangers’ chief executive Charles Green’s ambitious business plans supporting the float.

At one stage, the shares touched just under 78p, with some investors taking immediate profit.

The club raised a total of £22.2 million, of which £17m came from a “placing” of shares directly with big institutional investors, including Legal & General, Hargreaves Hale and Artemis.

The other £5.2m was raised from private individual shareholders, many of them fans of the club, and gives Rangers a current stock market value of about £46m.

A cockahoop Green, who took over after the club collapsed and was relaunched in the Scottish third division, said: “There are now serious talks going on about a restructuring of Scottish football and the European game.

“There are lots of alternatives. Rangers, being the size it is, will be involved in those restructuring moves. That is where institutions see the growth story.”

He added: “We are delighted to see our plans for bringing Rangers back to its glory days coming to fruition, a key part of which is its listing on AIM today.

“The response from investors and fans alike has been tremendous and we are very proud to have such loyal supporters.”

One City source close to the float, said: “The company is particularly pleased that, despite the economic backdrop and the timing just before Christmas when money is tight, they raised over £5m from fans and other private investors.”

Green’s “play” to institutional investors was that they should not judge the float by the history of other clubs that have gone, with very mixed success, to the stock market, and the unorthodox economics of many clubs.

He stressed that Rangers was now a debt-free football club, but still a huge global brand with attendances of 40,000-plus week in week out. One source said: “It was like starting brand new for investors, in terms of a clear company balance sheet, but with an already fantastically 
established worldwide brand.”

Green also promised investors that Rangers’ player wage bill will not rise above one-third of revenues in a bid to persuade them that the club will be managed with the rigour of a publicly quoted business. The wage bill at Manchester City, by contrast, is about 114 per cent of revenues.

But Green is said to believe the opportunities for growing commercial revenue, particularly abroad, will sharply push up income and allow the club to increase wages gradually to attract top stars again.

In the autumn, Rangers had initially said they wanted to raise £20m from the listing, but recent reports had speculated that this might rise to £27m. In the event, the club and its City advisers decided it would be safer to try to raise more than initially anticipated but not to “over-egg” things with a top-of-the-range capital raising.

Rangers say the money raised will help in buying players, developing club properties and land, and providing working capital.

Cenkos, the nominated adviser to Rangers in the AIM listing, has predicted that the equity value of the club could double within three years.

Yesterday’s listing involved 24.2 million shares being issued to institutional investors, such as insurers, pension funds and other market professionals. A further 7.4 million went through the public offer.

One City source said: “We believe no fan or other retail investor who applied for the shares will have had their cheque returned to them.”

Meanwhile, one City analyst said: “Shares in football clubs are a punt. But, with Rangers’ medium-term prospects, and no debt, it can be portrayed as a somewhat more calibrated risk, by the institutions in particular.”