Brian Kennedy says he will only make a late offer to take over Rangers if a rival bidders' approach is to take the club into liquidation.
The SPL giants were placed into administration back in February and several parties have expressed an interest in buying the club.
Rangers' administrators are expecting to receive up to five bids by Wednesday's 5pm deadline and reports claim that US consortium Club 9 Sports is moving towards preferred bidder status.
However, there are reported concerns about Club 9 Sports' future plans for Gers and Sale Sharks owner Kennedy is waiting to see how the day develops.
"The prospect of a newco frightens the living hell out of me," Kennedy told the Daily Record.
"Whatever euphemism you may want to use, we are ultimately talking about the liquidation of Rangers FC and the selling of its assets into a newco, with all the issues which result from that.
"If this is the only option left standing, that's when I will come back in.
"The financial model involved in a newco situation does not work unless you are prepared to invest many millions of pounds and take a four-year view on the club's finances. You would need to accept losing excessive amounts of money.
"These guys will be looking for a decent return. They are not doing it for the love of Rangers so why enter into a deal like this?
"The existence of the club is at stake and the next 48 hours could be crucial."