• Text size      
  • Send this article to a friend
  • Print this article

Rangers bid tycoon had made £20,000 before leaving school

The self-made Scottish tycoon who yesterday confirmed his intention to buy Rangers Football Club in a £32m deal made his first thousands as a schoolboy dabbling on the stock markets.

Motherwell-born Craig Whyte was trading stocks and shares at 15, reputedly making a £20,000 profit before he left school in Glasgow.

The 39-year-old once held an executive box at the Ibrox ground he could soon call his own, and is a lifelong fan.

Loading article content

In a statement released to the Stock Exchange yesterday, Mr Whyte confirmed he was in talks with current owner Sir David Murray and hoped to make a move on the debt-laden club. Negotiations are at an early stage, he added, “and there can be no certainty that an offer will ultimately be made”.

The Herald understands Mr Whyte is considering a joint approach with Andrew Ellis, the property developer whose much-vaunted attempt to gain control at Rangers came to nothing earlier this year.

Mr Whyte is believed to be putting up 75% of the money involved, with Mr Ellis and associates providing the remaining 25% in a deal worth about £32m, including about £25m of debt repayments.

Early boxes have been ticked and the funds are said to be readily available, but parties on all sides have stressed that the sale is far from a done deal. The Rangers board has yet to be approached, the Stock Market statement added.

Once the youngest self-made millionaire in Scottish history, Mr Whyte has built up a billion-pound empire through years of corporate recovery, turning distressed operations into money-making machines, and any tenure at Rangers would likely be no different.

But while Mr Whyte is said to have such a flair for business that he made his first fortune before finishing his Highers at the prestigious Kelvinside private school in Glasgow, his career has not been without its knocks.

In the early 1990s his first company, Whyte Hire, went down with debts of £300,000, taking staff with it.

“It hurt my pride more than anything else,” he said afterwards.

Undaunted, he bounced back with a vengeance, branching out into security, manufacturing and property.

He now sits at the head of a complex maze of interlinked firms around the world, with more than a billion pounds of assets behind him.

Registered at some of his companies under his middle name, Thomas, he helps run a Russian doll-style arrangement of firms, some dormant, and in turn owned by another branch of the business empire.

One of his companies, Merchant Corporate Recovery, faces the threat of dissolution by Companies House over its failure to file accounts due in July. A proposal to have it struck off -- effectively a final demand, giving three months to comply or wind up operations -- was still active last night, though a company spokesman said it expected to file “in the very near future”.

Mr Whyte’s personal wealth is considerable, and in 2006 he bought Speyside retreat Castle Grant, the traditional seat of the chiefs of the Clan Grant near Grantown-on-Spey.

He and his wife Kim, from whom he is now thought to be separated, divided their time between the Scottish home and London, with another address registered near Motherwell.

Despite uncertainty over their club, fans have been buoyed by news that an end to Rangers’ financial saga could finally be in sight.

Supporters Trust spokesman Kenny Park said: “This appears to be a very positive development for the club, and Rangers fans will welcome any initiative that stabilises the club’s finances and enables it to move forward.

“We look forward to hearing further details of Mr Whyte’s plans and working with him and his board as they build for the future and strive to continue Rangers’ proud tradition of success.”

The club’s debt with Lloyds stood at £27.1m in June this year, but it would be wiped out if the new deal goes ahead. Mr Whyte and his partners would be buying out Sir David controlling stake -- about 85% of total shares.

London-based Mr Ellis has made previous approaches to the club, fronting a consortium that told the Stock Exchange in June that it was in “advanced negotiations” to take a controlling interest in Rangers. However, the deal fell through and hopes of a sale have been subdued ever since.

  Maybe profit is not the aim of the game

COMMENT: David Glen

In buying any football club there are three different pots. One will be the amount you’re going to pay shareholders for shares, and the second -- in this case more important -- is how much you need for debt.

The third is the one for future investment in the club, if you’re going to take it forward.

There’s not been much in the way of profitability with Scottish football, and clubs have struggled to keep expenditure within income.

When you’re looking to invest you want either income yield coming off it -- and I really don’t think you’re going to get that in football -- or you’re looking for longer term capital growth. I don’t see much prospect of that in the short to medium-term in Scottish football.

There is the issue that it struggles to generate additional income in terms of television rights and so on. In the long term, you could get that if you got involved in some of the wider leagues, involving English clubs.

Perhaps Craig Whyte is just doing it for the love of the game.  David Glen is a partner at accountancy firm PwC and author of the annual financial review of Scottish football.

 

  What any new owner will receive

IF the deal goes ahead, Craig Whyte and his partner Andrew Ellis will have a controlling stake in the club. But what will their money buy them?

  Ibrox Stadium: With origins going back to 1899 and fixtures dating back to 1928, it’s one of Scotland’s largest stadiums and the 10th biggest in the UK, with a capacity of 51,082. Three modern stands were built in the late 1970s and early 1980s and it houses the Rangers Megastore and corporate hospitality suites. Murray Park: Training facility at Auchenhowie, near Milngavie. Opened in 2001 by then manager Dick Advocaat and chairman Sir David Murray, after whom it is named, it cost about £14m to construct. It is often used as a training ground by visiting national teams and has six full pitches, a state-of-the-art gym and a media editing suite for making training videos. The staff: A squad of 31 players plus support and coaching staff. Bankable stars like Algerian defender Madjid Bougherra and strikers Kenny Miller and Steven Naismith will add to the appeal. More than half of the current squad is Scottish. The debt: Hitting £27.1m in June 2010 and now thought to be about £25m. This will make up the bulk of any deal, with the £32m figure being quoted including just enough for Sir David to recoup his original £6m investment. The land: Car parks and other areas around Ibrox, with some development potential. Any building near the ground would likely be subject to protracted planning battles.

Commenting & Moderation

We moderate all comments on HeraldScotland on either a pre-moderated or post-moderated basis.
If you're a relatively new user then your comments will be reviewed before publication and if we know you well and trust you then your comments will be subject to moderation only if other users or the moderators believe you've broken the rules

Moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours. Please be patient if your posts are not approved instantly.

PARCH1.1069441