By: HIBERNIAN MEDIA on 04 Jun, 2020 12:00
Thirty years ago today the country awoke to the breaking news that the Heart of Midlothian chairman Wallace Mercer had tabled an audacious £6.2-million bid to take over Hibernian Football Club.
As perhaps could be expected, the news that had been met initially with astonishment and disbelief would soon turn to anger and outright condemnation and within hours Easter Road would be besieged by anxious supporters all seeking information and reassurance.
A move that was described as breathtaking in both its boldness and arrogance would be confirmed at a press conference later that afternoon when Mercer unveiled his plans to create a single Edinburgh side capable of challenging the dominance of Celtic and Rangers and finally put an end to what he described as tribalism in the city.
Just weeks before, in partnership with the then-Rangers chairman David Murray and with the backing of the Bank of Scotland, Mercer had unveiled plans to construct a new ‘super stadium’ for Hearts on land owned by Murray on the outskirts of the city, a move that appeared to be no more than a thinly-disguised attempt to breach the legally-protected green belt.
Although the Hearts chairman had described his bid for Hibs as a merger, it was apparent to most that it was no more than a takeover attempt with the dual aims of destroying the Easter Road side and acquiring the land that would then be sold to finance his plans for the proposed new super stadium.
The situation would become even more transparent some time later when after being asked what the name of this proposed new Edinburgh club would be, he replied that perhaps some concession could be made regarding the name and its colours, a clear reference that the name Heart of Midlothian and the maroon would remain.
Later that evening at a packed Hibs Supporters Clubrooms, with hundreds more locked outside, a Hands Off Hibs committee had been formed led by the former Easter Road director Kenny McLean and a fighting fund set-up that included £20,000 donated by the Supporters Association and £1000 from an anonymous Hearts supporter opposed to Mercer's plans.
To understand the situation better we would need to go back to August 1987 when the 33-year-old Swindon lawyer David Duff and his brother-in-law Jim Gray had purchased the club from the then-owner Kenny Waugh for an estimated £875,000, the bulk of this money loaned by a mystery financier.
With a new board in place, soon goalkeeper Andy Goram would be purchased from Oldham for £325,000 and Neil Orr from West Ham for £100,00, both transactions suggesting that the club was in a healthy position financially.
Just over a year later Hibs would become the first club in Scotland and only the second in the entire country to be floated on the stock market. The share issue had proved an immediate success and would soon be oversubscribed by as much as 54 per cent after being snapped up not only by individual supporters but financial institutions.
With the club now divided into three separate sections, the land and property sector was given the responsibility of investigating future business investments and soon The Talk of the Town nightclub in the West of England would be purchased for around £1 million followed by the Lenwood Sport and Country club in Devon for £400,000.
Both these acquisitions would soon be joined by the purchase of Avon Inns, a pub and restaurant chain in the West Country for £5.75 million, the finance to be raised by new share floatation. It would later turn out that all these properties had been in receivership at the time and all owned by the venture capitalist David Rowland, who turned out to be the mystery financier behind the £800,000 loan that had allowed Duff and Gray to purchase the club.
It had been anticipated that the new share floatation would raise in the region of £5.75 million, instead it would turn out to be an unmitigated disaster. Only a small percentage of the shares would be taken up by the fans, the rest left in the hands of financial institutions with no real interest in football, a situation that would severely weaken the financial stability of the club.
A loss of £1.6 million had been reported the previous financial year, bringing Hibs' overdraft to just under £6 million compared to the £300,000 when Duff had acquired the club just over two years before, and Allan Munro - a respected Edinburgh fund manager - had been brought in to help the club through its financial difficulties.
It was now evident that Hibs were in severe financial trouble, the shares falling from an initial high of over 75p each to as low as 17p although they had since recovered to around 22p, and a rumour had circulated that Duff might now be willing to listen to offers for the Avon Inns group. Called by Rowland to a board meeting in London to meet a prospective buyer, speculation that it might be Robert Maxwell was immediately dispelled when who should enter the room but the Hearts chairman Wallace Mercer.
It now turned out that Rowland had received 30 per cent of the initial share issue worth around £2 million plus any profit from the sale of Avon Inns, making him the only winner in the deal. Now with the guarantee of Rowland’s shares plus others promised by several financial institutions Mercer appeared to have more than the 51 per cent percent required to give him controlling interest in the club. However, unless he could achieve 75 per cent, the figure legally required to force through the sale, he would be forced to withdraw.
Meanwhile, back in Edinburgh, the Hands Off Hibs committee had been refused permission to hold a protest march through the city by the police, who feared trouble, and instead it had been decided to stage a rally at Easter Road on the Saturday. Attended by Hibs supporters from all over the country as well fans of many other clubs, including Hearts, several prominent former Hibs players had also rallied to the cause to lend their support.
Perhaps the most poignant moment of the entire afternoon, however, had been the sight of the legendary Joe Baker kneeling to kiss the Easter Road turf, the emotional event ending with an moving rendition of the football anthem You’ll Never Walk Alone by The Proclaimers.
Later at a protest rally at a packed Usher Hall, MP Margo McDonald would be joined on stage by the then Hearts centre-forward John Robertson, who apparently had defied Mercer’s orders not to attend.
For weeks the fans had also taken to the streets collecting petitions, several picketing the Bank of Scotland headquarters on the Mound. Later a ‘Battle Bus’ would deliver the petitions to Tynecastle where the Hands Off Hibs committee were said to have been received cordially by several of the Hearts directors who may well have been sympathetic to the cause. A couple of Hibs supporters living in London, however, would go even further by handing over a copy of the petitions to Margaret Thatcher at 10 Downing Street.
With so many prominent individuals including local councillors, MPs, and even the planning department all strongly opposed to Mercer’s plans as well as the ordinary man in the street, it was now evident of the strength of feeling against the audacious scheme, and after only managing to eventually gather 62 per cent of the shares, well short of the required number, it would now be obvious to Mercer that he was losing the battle.
Even an extension of the original deadline followed by the suggestion that Hibs could now survive and share the proposed new super stadium on the west of the city would fail to change the situation and at the end of the day Mercer would be forced to withdraw completely. Even then Mercer was reported to have been ‘flabbergasted at the reaction of the Hibs support who had failed to buy into his ‘vision for the future’.
Hibs had survived, but even with a brand new committee in place it still remained in a perilous financial position and within months, failure to pay a VAT bill would result in the receivers being called in. Two bids for the club were received; one from former owner Kenny Waugh, the other from a consortium led by Tom Farmer, the latter eventually accepted as the preferred bidder. Although the club would continue to play at Easter Road for several months it was now generally accepted that they would have to move, possibly to Meadowbank or more likely to a new stadium at Sraiton on the south side of the city.
Fortunately, particularly for a new generation of Hibs supporters, the financial obstacles would eventually be overcome and the club remains to this very day at its spiritual home.
Tom Wright, Club Historian