Kevin Thomson claims Josh Mulligan had agreed a move to Rangers earlier this summer.
But the switch collapsed after a change of ownership and recruitment at Ibrox.
Mulligan, 22, was a standout for Dundee last season and attracted interest from the Light Blues in January .
Gers already struck a pre-contract agreement with Dens Park teammate Lyall Cameron and were weighing up a double swoop.
But the Ibrox outfit decided to pause their transfer business as the club rubberstamped the appointments of sporting director Kevin Thelwell and head of recruitment Dan Purdy.
Hibs then quickly moved to the front of the queue and completed a major coup by luring the versatile star to Easter Road. Article continues below
Mulligan has hit the ground running in Leith and ex-Ranger