Saru Stung With R14 Million Bill After Failed Investment Deal

The South African Rugby Union SARU is facing a substantial financial setback following the collapse of a private equity deal last month, Cape town Etc reports.

The proposed partnership with Ackerley Sports Group, which sought to secure a R1.4 billion investment for a 20 stake in SA Rugbys commercial rights, ultimately fell apart after failing to meet the crucial 75 approval threshold required from local rugby unions. The deal was rejected during a special meeting in December, leaving SARU to bear the brunt of significant financial repercussions.

A recent letter sent to provincial union heads reveals that SARU will be saddled with an estimated R14 million in transaction fees, a direct result of the unsuccessful deal. These fees are associated with professional services related to the failed bid and come without any commission payable to the involved parties.

The breakdown of the situation was detailed in the letter, which also clarified that the agreement between SARU and its commercial agent, which facilitated the deal discussions, has now ended. The document further elaborated on the complex process SARU undertook in selecting Ackerley Sports Group as their preferred bidder after initial talks with other investors, such as CVC Capital, had fallen through. It also addressed the controversial 15 commission fee attached to the deal, which had been a sticking point for many involved in the negotiations.

Compounding the situation, news emerged earlier that SARU's CEO, Rian Oberholzer, had been appointed as the sole director of a private company called 'Win By One' months before the deals collapse, raising further questions about the process behind the selection of Ackerley Sports Group.