VIDEO: Are WPRFU finally ready to cede control?
The Western Province Rugby Football Union’s power-hungry and often gladiatorial clubs are faced with an important decision: to cede or retain control of the company, WP Professional Rugby (Pty) Ltd.
The unwillingness to cede control was one of the key reasons why South African-born-and-bred American lawyer Marco V Masotti and his consortium, MVM, walked away from equity negotiations with WPRFU.
MVM wanted a controlling 51 percent share of the company, WPPR, and the union [read clubs] was unwilling to give up power.
Now they are faced with the same conundrum – albeit with a bit more time to do their homework – as the company and union enter into negotiations with two potential equity partners.
WPPR Chairman Ebrahim Rasool this week revealed that they are “on the verge” of having detailed negotiations with two potential equity partners, who are global concerns.
Rasool confirmed that “non-disclosure” agreements have been signed with both and they are now doing their “due diligence”.
He suggested the big difference between the MVM talks and the discourses with the new equity partner is that they were very “reactive” with the American consortium.
Rasool went as far as to suggest the Marco Masotti came with a ‘take it or leave it’ approach.
“In this case, we are doing all the proactive, precursor steps,” he told a virtual media briefing.
“[We are looking at] what is the brand worth? What is the union worth? What is the projected income? How does that affect the value?”
Once they have an accurate valuation of the brand, then they will look at the percentages in the deal.
“We have even begun to have a discussion about whether we are prepared to cede control of the company.
“I am not saying that is the decision, but those are the discussions we are having.
“Before [with MVM] the 51 percent [controlling share they asked] caught us like a deer in the headlights.
“Now, we are having proactive discussions about what the implications are, if we were to give away control.
“The current shareholder, WPRFU, must decide how much it wants to dilute its 100 percent.
“We will put this into the wash, with our negotiations, with our potential equity partners.
“We will be much better prepared for such a discussion.”
He suggested this time round they are not as desperate, with their backs against the wall.
(Article continues below video – in which Rasool discusses the equity partners and control of the company …)
The question of union and club interference and internal politics was also raised.
“The union being the [100 percent sole] shareholder, needs to have a primary discussion about diluting its shares and whether it cedes control over the company,” Rasool said.
“Alongside the negotiations with the potential equity partners, there is the discussions between the company – represented by the board – and the shareholders – represented by WPRFU [and clubs] – about reviewing the memorandum of incorporation.
“Those two steps were missing in our previous rounds of discussions.
“We can’t get away from the primary decision of dilution of and selling off the shares from the union to an equity partner.”
He said because both the President of the union, Zelt Marais, and the Chairman of the WPPR board, Rasool, are involved in all of those discussions it would “hopefully” minimise any kind of internal politics.
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* Below is the full video of the extended media brief. Warning in is over 40 minutes long!
