Premiership Rugby reject CVC's £275m takeover offer but send open invitation to potential investors

The 13 Premiership shareholders do not want to sell a majority stake in order to keep control of the league with the clubs, says chairman Ian Ritchie

Premiership Rugby chairman Ian Ritchie confirmed CVC Capital Partners' offer had been rejected (Getty)

Premiership Rugby has rejected the £275m majority takeover offer from CVC Capital Partners, the former owners of Formula One, but sent out an invitation to potential investors that the league is very much for sale – so long as it is not for more than 50 per cent.

All 12 Premiership clubs, plus Championship side London Irish, voted unanimously against accepting the offer, which was for a controlling stake of more than 50 per cent and valued the league at around £550m. The private equity firm had expressed an interest in taking control of the English league with a view to selling it for a substantial profit in the future, as it did with F1 between 2006 and 2017.

But Premiership Rugby chairman Ian Ritchie said after Tuesday afternoon’s board meeting that the growth of the league over the last five years and it’s projected path – with the belief that a similar trajectory will see the Premiership valued at more than £1bn by the end of the next decade – means that the offer combined with the loss of control resulted in rejection.

“Premiership Rugby has seen very good growth over the last five years with revenues rising more than 80 per cent – so the desire to accelerate that growth and expand internationally was reaffirmed by all clubs today,” Ritchie said.

“We had a very positive board discussion and considered a range of alternatives to accelerate investment in the club game. The board was unanimous on how to proceed and agreed that selling a majority stake was not the preferred option.

“We shall now develop these options further with our advisors and the interested parties ahead of the next board meeting.”

The 13 shareholders will sit down again in mid-October to discuss the other options on the table, with a number of interested parties looking at the Premiership as a potential area for investment.

With 12 of those 13 clubs posting losses last year – Exeter Chiefs proved the exception – and a collective debt of around £30m per year, club owners are very much in favour of finding ways to generate new funds. CVC’s offer, had it been accepted, would have seen each club land a £17m overnight payment that would have written off the majority of those debts, but that number will only swell if a larger offer arrives.

But what is more important to Premiership Rugby is having a say on the future of the league, which it would have lost by selling a majority stake to CVC.

“As a matter of principle I think we would say that a majority stake is not the preferred option, but we would look at minority stakes, people who are either investors or who can bring added value to that, and again there was a good unanimity around the table of wanting to pursue that further,” Ritchie added.

CVC Capital Partners has failed in a £275m takeover approach for Premiership Rugby (Getty)

“External people clearly see the league as something of interest to invest in because they see a further growth, as do we, and this is all about how do we engage further in growing from a strong base into something that develops even further.

“And obviously investment, whether it be in stadia, in digital content, in a whole variety of areas, is something that then gives us an opportunity to catapult into the next stage.

“[It was] a very good and constructive discussion, a view forward that we want to engage on that, that we’re open to that sort of investment and as I say a position that the majority sale is something that’s not the preferred option because again we think that control is something that by and large we would want to keep within the clubs.”

Mark McCafferty insisted progress with future investment will be swift (Getty)

There was also a move to try and ease any fears among the Rugby Football Union over any takeover. Had CVC succeeded in their attempt, there was a risk that the firm would look to hike fees for the release of international players in order to increase profits, but Ritchie – who struck the current Professional Game Agreement with Premiership Rugby chief executive Mark McCafferty two years ago that runs until 2024 – allayed those concerns.

“Future developments are likely to be on a partnership basis between PRL and the RFU,” he said. “So I think we all recognise that’s the way forward, whether majority or minority stakes, I don’t think anyone would view that any differently.

“All of this is something that investment into the game and the league is something the RFU would be positive about.”

McCafferty (left) and Ritchie (right) both hailed the unity of the 13 clubs (Getty)

Bath owner Bruce Craig was known to be against CVC’s offer, but in the end all parties decided that the best move, for now, was to reject the offer. McCafferty believes that the unity shown between the club owners and the expression of a clear desire about what they want from any future negotiations will enable Premiership Rugby to progress swiftly with their next steps to ensure that when the board sits down again next month, they could be in a position to act upon any of the “several” interested parties.

“I think you know us well enough that one of the things we don’t do is hang around,” said McCafferty. “Now we would be looking to move to the next stage relatively quickly, because there’s a lot of opportunities out there in terms of what we want to do to grow the business, and there’s no point in hanging around if you can put the right kind of deal together.

“Our shareholders are great in that once they are aligned, they want things to happen quickly which is great.”