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Dave King on the hook for £14m - forced to bid 20p for Rangers FC and caned by Takeover Panel

By Tom Winnifrith | Monday 13 March 2017

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.

The Takeover Panel has today slammed Rangers (RFC) supremo David King for breaching the UK Takeover Code as well as being a prize arse in not co-operating, indeed appearing to obstruct, its enquiry. The upshot is that he has now been told that he must launch a 20p per share offer for the 85.43% of Rangers he does not own by April 12. That will cost him up to £14 million if everyone accepts.

King was ruled to have acted in a concert party with George Letham, Douglas Park and George Taylor who, together owned just under 20% of Rangers. King owns just under 15%. A Concert party are a group of individuals who are deemed to share a commonality of interests. If a concert party takes its ownership over 30% then - as would be the case where 1 person takes its ownership of a company over 30% - it is forced to launch a full bid at the highest price paid in the proceeding 12 months.

This case has been brewing for several years with King appealing an original ruling and clearly not co-operating at all with the appeal. He did not bother to attend or send a representative to the final hearing of the Panel which is a body made up of the great and the good of the business world.

Does King have £14 million to make an offer? There are a lot of folks who doubt that. Might he make one anyway since most RFC shareholders are fans who probably would not sell at any price even though the shares are probably almost worthless? He might. But should acceptances rack up and he then be shown not to have the funding he'd been is serious trouble so that is a risk he is unlikely to take.

If King refuses to launch a bid the normal first sanction is for the Panel to order that a miscreant be "Cold Shouldered", that is to say to bar any financial services firm in the UK from doing business with that person. But would King care? No. So perhaps, given that King has clearly pissed off the Panel big time it could go to Court, asking that King face a large fine. Of course his only UK assets are his 14.57% of the (worthless) shares in Rangers and so they could be seized and put up for resale. One suspects that they would not fetch anything like 20p a pop.

Next move: Over to Mr King at, pro tem, Rangers FC, the comedy show that keeps on giving.

Mr King has now responded. His statement is utter horse as you can see HERE as I provide some analysis of the rubbish he spouts.

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