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Rangers rejects Sarver approach and warns it needs more cash in January

Last updated: 08:31 06 Jan 2015 GMT, First published: 09:31 06 Jan 2015 GMT

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Rangers (LON:RFC) has rejected the takeover approach from American financier Robert Sarver, and has told investors that it still needs to bring in more cash before the end of January.

The ailing Scottish football club yesterday received a £500,000 emergency loan from director Sandy Easdale, to stave off a winding up order relating to outstanding national insurance payments.

Today it revealed discussions are underway with significant stakeholders with a view to arranging finance; the company envisages this will comprise loans in the short term, and possibly an equity element at a later date.

Whilst snubbing Sarver’s approach to buy the company, the Rangers board has invited the American investor to consider participating in the planned financing.

Rangers, in a stock market statement, said Sarver’s takeover proposal did not adequately value a controlling interest in the company.

Additionally, the company revealed that the proposal involved a placing of 100mln shares to Sarver at a price of 18p and said the proposal would be unlikely to get support from a sufficient number of existing shareholders (it would need to be approved by at least 75%).

The rejection of the offer came after Barry Leach - an associate of influential 9% shareholder Mike Ashley – was appointed as the company’s new finance director.

Sarver, in a separate statement, said he was prepared to make a significant investment into the club.

"First and foremost I believe what the club needs today is a very quick, major injection of capital to stabilise things and I can give the Rangers supporters a categorical assurance that I have the resources and ability to get this club back to its elite level.

"I'm looking forward to building a consensus amongst supporters and prominent Rangers-minded figures who have the long-term success of the club at heart.”

Sarver is the owner of two basketball franchises in Arizona, and he has revealed that he became aware of Rangers situation via former player Davie Robertson – who coaches Sarver’s sons in Phoenix.

The financier already had advisors examining potential investments in the English Premier League and in Spain, he added.

Rangers' ongoing financial problems and the transient nature of its management and ownership structure indicate the book is far from closed.

One complicating factor, potentially, was the share transactions last month that saw a group of investors – comprising Dave King, George Letham, George Taylor and Douglas Park – buy a third of Rangers’ shares.

At that same time Mike Ashley may yet prove to be influential in the outcome of any offer.

Ashley, the controlling stakeholder in Sports Direct, and who also owns Newcastle United, was blocked by the Scottish football authorities from taking a 30% stake in Rangers last month.

He is prevented from increasing his ownership stake but still retains control of Rangers’ retail operations and owns almost 9% of the club.

In Tuesday’s early deals Rangers shares were down 1p, 3.85%, trading at 25p.

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