The battle to acquire a stake in the South African Rugby Union’s (SARU) commercial rights took another twist when it was revealed that another group of businessmen are keen to become the governing body’s equity partner.
According to a Netwerk24 report, a second group of South African businessmen have put forward a proposal to rival the proposed equity deal between SA Rugby and US-based private equity company Ackerley Sports Group (ASG) which was rejected by provincial unions on Friday.
A 75% majority had to be achieved in the vote in which 13 member unions participated but seven of those unions opposed the deal.
ASG can submit a revised bid before the end of the year
However, ASG hold an exclusivity period until the end of 2024 when they can submit a revised bid. That means ASG can still consult with the investors in its consortium and come up with a revised offer.
Earlier in the week, shareholders of several of South Africa’s rugby franchises and unions – including the likes of billionaire Johann Rupert, Marco Masotti and Johan le Roux, who respectively hold controlling interests in the Bulls, Sharks and Stormers – wrote a letter to SARU in which they said they want to make an offer that will be financially significantly more beneficial to South African rugby than ASG’s.
The big sticking point of the initial ASG deal is its huge commission – 15 per cent – which must be paid to Formula 1 team owner Eddie Jordan’s Jordan and Associates for putting the deal together.
The Rupert, Masotti and Le Roux group said their proposal would not include a commission and the new consortium made a similar indication.
South Africa: Private equity deal falls through after failed vote with member unions
The new consortium issued a letter to SARU’s bosses Mark Alexander (president) and Rian Oberholzer (chief executive) in which they expressed an interest in acquiring a stake of between 20% and 40% in Springbok rugby’s commercial rights.
The new consortium consist of businessmen from the following South African companies: AltVest Capital, 27four Investment Managers, EasyEquities and RainFin. South African financial services provider Sanlam has a 30% stake in EasyEquities, of which the Purple Group – a listed company on the Johannesburg Stock Exchange – is the parent company.
According to the consortium’s strategy, the ordinary man in the street will be able to buy shares in the commercial entity through the EasyEquities’ platform.
‘Let’s empower every South African’
“Why can’t a car guard at Loftus, a supporter in the Eastern Cape and an institutional investor in Sandton all have ownership in the Springboks? Let’s empower every South African to share in the pride and success of the Goats,” said Warren Wheatley, chief executive of AltVest Capital via a press release.
He added that the consortium has expertise in the areas of private equity, asset management and innovative financial products, which can build on the Springbok brand.
This consortium estimates that the Boks‘ brand name is worth $375 million. That means 20% comes down to the $75 million investment, which ASG wanted to make.
READ MORE: Sir Steve Hansen claims Springboks are ‘very beatable’ but worried ‘myth’ will make All Blacks task ‘harder’
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