Which Dis-satisfied #Rangers Shareholder Sold 1.5 RIFC PLC Million Shares?

Bill McMurdo seems to have his finger on the pulse of Rangers sentiment, and has many contacts amongst the leaders and former leaders of his favoured team. This is exemplified by a piece on his blog yesterday, which can be read in full here.

In it he speaks to Charles Green about his wish to return to a senior position within Ibrox. He also denies suggestions that recent share sales, which contributed to the slump of over 20% in the share price, were his doing. As he correctly says, he is prevented from selling his shares until 12 months after the float.

One particular line which is of interest in Mr McMurdo’s piece reads as follows:-

Green said: “I have 5 million shares and have not let go of 1.5 million over the past few days. The shares sold were by an investor who is not happy with the way things have gone.”

Mr Green therefore knows who sold the shares and why they did so.

Looking at the list of major shareholders from the Rangers website, which details those who own 2 million or more shares, can we try to work out who the seller was?

The list is below:-

Charles Green	5,071,629	7.79%
Hargreave Hale Limited	5,022,000	7.71%
Artemis Investment Management LLP	4,286,000	6.58%
Blue Pitch Holding	4,000,000	6.14%
Mike Ashley	3,000,000	4.61%
Margarita Funds Holding Trust	2,600,000	3.99%
Cazenove Capital Management Limited	2,450,000	3.76%
Richard Hughes	2,200,000	3.38%
Imran Ahmad	2,200,000	3.38%
Legal & General Investment Management Limited	2,000,000	3.07%

 

In addition, the RIFC PLC Prospectus discloses major shareholdings BEFORE the float.

That list shows that the major shareholders prior to the float, owning over 1.2 million shares consisted of Mr Green, Blue Pitch Holdings, Margarita Funds Holding Trust, Richard Hughes, Imran Ahmad and Craig Mather.

It is understood that none of these “founder” investors paid the full offer price of 70p per share.

The remaining investors from the above list, being Hargreave Hale Ltd, Artemis Investment Management LLP, Cazenove Capital Management Ltd and Legal & General Investment Management Ltd, are likely to have paid the full price for shares.

So we either have one of those institutions selling 1.5 million shares at a loss of about 28p each, making a real, as opposed to paper, loss of £420,000, or it was one of the original investors.

It cannot be Mr Green or Mr Ahmad, due to their tie-ins.

It cannot be Mr Mather, as such a share dealing by a current director, would require to be disclosed.

We are then left with the mysterious Blue Pitch Holdings, or the equally secretive Margarita Funds Holdings Trust; or Mr Hughes, main man in Zeus Capital from whence Messrs Ahmad and Stockbridge came or Mike Ashley, the owner of Newcastle United and Sports Direct.

The natures of the so-called “shadowy” Blue Pitch and Margarita Funds make it less likely, I think, that it is either of these investors – my reading of Mr Green’s words leads me to believe he is talking of an individual.

If Mike Ashley was selling shares because he was not happy with how things had gone, then one would expect to have heard some discussion about this. Mr Ashley is not a man known for hiding his light under a bushel!

And, even at a price of 42p, these initial investors would make a profit on such a sale.

So, by a process of elimination, it seems that the most likely candidate for being responsible for the sale is Mr Hughes. He came into the deal, it would appear, at the instance of Messrs Green and Ahmad. Now that his two cohorts are gone, why hang about?

And if he too got his shares at a significant discount, as seems to have been the case, then he still had a profit to take at the diminished share price.

As I wrote before about the share price falling, as there is no possibility of a dividend being paid, then those who invested to make money can only do so by selling the shares. For someone in this position to sell when the price is half of what it was at its peak suggests that (a) they needed to raise funds by asset sales or (b) they wanted to take a profit before it declined even more.

However, as well as asking who sold the shares, one also wonders who bought them?

And that is for another day …

Posted by Paul McConville