Scottish Premiership: Rangers choose Mike Ashley offer over Brian Kennedy

The board of Rangers FC has voted to accept the offer of an emergency loan from Mike Ashley, thus rejecting one from Sale Sharks owner Brian Kennedy.

Ashley, owner of Premier League Newcastle, already owns an 8.92% stake in the club and will now enjoy greater influence within the club, following the board’s decision to accept his £2m offer.

Kennedy, who was a member of the Blue Knights consortium which failed to stop the club from sinking into liquidation in the summer of 2012, had made a last-gasp £3m counter offer.

However, cash-strapped Rangers have opted to put its faith in Ashley whose offer is expected to be ratified on Monday following an announcement to the Stock Exchange.

Ashley’s offer is believed to include a zero interest facility, with the potential to draw down unlimited funds. It is also understood that the loan offer is not secured against any club property.

The SFA are expected to contact Rangers this week to ask for clarity on Ashley's role at the club. Ashley has an agreement with the SFA that  restricts him from owning more than 10% of Rangers shares and from having undue influence in boardroom affairs, as a result of his ownership of Newcastle United.

Sky Sports News reporter Charles Paterson had reported on Friday that the club is thought to have a major funding shortfall, followed by the loss of around 15,000 season ticket holders, coupled with high staffing costs, which has left a huge financial hole.

Rangers’ most recent interim accounts in March of this year showed losses of £3.5m for the final six months of 2013, with the same amount available in cash reserves.

In September, the club belatedly repaid two £1m loans from major shareholder Sandy Easdale and supporter George Letham.

Earlier this week former director Dave King failed to reach an agreement with the Rangers board over a proposed £16m cash injection into the Scottish Championship club.

King has already returned to South Africa after talks broke down without an agreement. Backed by former Blue Knight Paul Murray and wealthy fan George Letham, King was looking for a controlling stake at Ibrox in return for a cash injection.

However, this required the approval of Sandy Easdale, the club's football-board chairman who controls around 26% of the shares.

Discussions were held overnight and it has been reported that, as part of the agreement, chief executive Graham Wallace would step down - Wallace was said to have supported the rescue package being put forward by King.

Meanwhile, Ashley's deal allows him to choose two directors to replace Philip Nash and Wallace although it has also been reported that the chief executive will not resign his position, meaning Ashley will have to press ahead with an EGM.

Paterson said: “Ashley's offer of an emergency loan, believed to be worth two to three million comes with the guarantee of boardroom control.

“It's understood Ashley intends to make two board appointments, whilst requesting the removal of current chief executive Graham Wallace.

“Earlier this month Ashley called for an EGM with a motion to remove Wallace and director Philip Nash, who resigned on Friday.  Wallace, I understand, has no intention of resigning.

“Sources close to Brian Kennedy's offer have said he is ‘disappointed for Rangers’ that his bid has not been accepted.

“Kennedy was contacted on Thursday about producing an offer that would give the board a further option to consider. The Kennedy offer is believed to have been a six-month loan of £3m which would not have required boardroom approval.

“Sources have also indicated that Dave King's proposed financial injection of £16m, in return for 51% of shares, has been rejected in part because board members were not convinced King would get approval from the SFA with regards to his viability as a fit and proper person.

“There were also seemingly unanswered questions about potential board members as well as the financial detail of his proposals.

“Rangers shareholder Sandy Easdale, who controls 26% of club shares, has played a deciding role in dictating that Ashley's offer would be accepted.

“With Nash gone and Wallace expected to leave the club imminently, there's now speculation over who Ashley will appoint to replace them on the board. One candidate could be Derek Llambias who previously served under Ashley at Newcastle United as managing director.”