RANGERS' new fund-raising effort may cause a judge-ordered £11 million bid by club chairman Dave King to fail, it has emerged.

The Rangers board have accepted that a proposed new fund-raising £12.6 million share issue might compromise a separate £11 million offer Mr King was told to make to shareholders to comply with the law over takeovers.

The Takeover Code forbid attempts to frustrate mandatory bids, like the one Mr King's has to make.

The Herald:

But it is understood there would be an exception if the new fund-raising issue was adopted by the majority of shareholders.

Mr King has previously argued that a judge went "too far" in ordering him to make a mandatory offer at a price of 20p a share. The club's separate offer involves issuing 63,147,137 new shares to 13 different individual shareholders at an identical price.

It has been confirmed that if there is not not enough take-up of the so far unforthcoming mandatory bid from Mr King, it would fail meaning the Rangers chairman could side-step contempt of court proceedings being brought by the Panel of Takeovers and Mergers.

The Ibrox chief has been fighting through the courts to stave off pressure to buy the shares, fearing the heavy financial toll it would place on him.

The Rangers chief has already been told that he is in breach of takeover rules by failing to make the mandatory bid.

In December, Lord Bannatyne agreed with the Panel that Mr King acted with other shareholders when he bought a controlling stake in 2015 ousting a board of directors said to be allied to Sports Direct founder Mike Ashley.

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That supported the Panel's view that a formal takeover should have been triggered after the Three Bears group led by Mr King secured more than 30 per cent of Rangers.

Under Takeover Code rules, anyone exceeding the 30 per cent threshold must make an equivalent offer to all other shareholders, thus ensuring all are treated equally.

A written offer to shareholders had to be made within 28 days of a bid announcement being made on March 29 - but so far it has not been forthcoming. Mr King has previously said the bid made through his South African-based Laird Investments (Proprietary) Limited has been held up because he has yet to transfer funds to the UK.

In a circular to shareholders, the board of Rangers International Football Club plc (RIFC) in calling an meeting at the end of August where final approval will be sought for the issue of £12.6m of new shares, recognised the effect it would have on Mr King's mandatory bid.

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If the separate judge-ordered offer fails to give Mr King more than 50% of the company, then it will fail.

As the new issue would increase the number of ordinary shares in RIFC from  81,478,201 to 144,625,341, it is considered that the 50% shareholder acceptance level needed to ensure the offer is successful will be far harder to reach.

The Rangers board said: "Shareholders should note that, if this resolution [to allow the new shares issue] were passed, it could affect Mr King’s mandatory offer obligation..."

They accepted that it would "substantially increase" the number of acceptances from existing shareholders that would be needed "for such an offer to become unconditional".

"Because shareholders subscribing at 20p per share are unlikely to accept an offer at the same price, the passing of the resolution may make Mr King’s offer less likely to succeed."

A takeover procedure expert said that the rules have a provision preventing anyone from doing anything to frustrate a mandatory share offer - but there was an exception when it comes to anything approved by shareholders in a general meeting.

"The effect of the notice to shareholders is that they must understand that if they do approve the new share issue, it will make it a bit easier for the mandatory offer to fail. Or, put another way, make it harder for the offer to succeed," he said.

The Herald:

"The Takeover Code rules have a provision preventing target companies from doing things to frustrate an offer, but there is an exception when it comes to things that are approved by shareholders in a general meeting.

"If you have a shareholder meeting to approve it and 50% plus one vote approve it that is okay. That's what is happening. That's just democracy, right."

One of the outstanding issues still to be overcome by Mr King is to have a third party provide cash confirmation that the money for the judge-ordered bid for shares is actually there.

Under Takeover Code rules if the confirmation is given and the money is not there, the Panel can bring an action against the third party 'guarantor' to recover the money for shareholders.

In April, a letter to shareholders from John Bennett, the chairman of an "independent directors" group of RIFC said that an original announcement from Mr King's company had not been "cash confirmed" by a third party as required by Rule 2.7(d) of the Takeover Code.

He said in a circular that "this will be addressed promptly" after April 4 so that when the official offer to shareholders is made, the cash to fund it will be ringfenced by a third party.

The Herald:

The King-led takeover group – which included Park's Motor Group founder Douglas Park, Rangers Supporters Trust and Rangers First member George Taylor and Rangers fan George Letham – had always denied that they had acted 'in concert' to purchase shares in Rangers on December 31 2014 and January 2, 2015.

Last week it emerged the Lord Advocate was being asked to intervene in the contempt of court case over Rangers chairman Dave King's failure to make the judge-ordered bid.

The call is believed to be responsible for delaying what is the first enforcement action Panel has taken since being given statutory powers 12 years ago.

The question of the Lord Advocate's involvement has arisen because the unique court action by the financial watchdog is being brought as a civil matter that could have criminal consequences. Contempt of court is punishable by a fine and imprisonment.

A hearing is expected in early October to hear submissions from counsel over whether the Lord Advocate should be able to run the rule over the case and pass any comment.

Mr King said at the end of last month he has no concerns about the prospect of a contempt case and insisted he is doing all he can to settle the matter.

The Takeover Panel declined to comment.