(Bloomberg) -- A consortium interested in bidding for a stake in the commercial rights of South Africa’s Springboks wants to give fans an opportunity to invest in the reigning rugby-union world champions.
The member unions of SA Rugby - which oversees the national team - on Friday rejected its plan to sell a 20% stake in a newly created commercial-rights company for $75 million to Seattle-based Ackerley Sports Group LLC. While the American firm has an exclusivity period until the end of this year to make a revised offer, local investors have expressed interest in acquiring a share of the rights.
A consortium comprising Altvest Capital Ltd., investment platform EasyEquities, 27four Investment Managers Ltd. and RainFin Ltd. has submitted a proposal to buy as much as 40% of the commercial rights through a special purpose vehicle.
If successful, the group plans to list the SPV on Johannesburg’s stock exchange and allow retail investors to buy shares for as little as one rand ($0.06) through EasyEquities, Alvest’s Chief Investment Officer Akshay Karan said in an interview.
Sign up for the twice-weekly Next Africa newsletter for the latest business and economic news from the continent.
The national team “is a symbol of excellence and we have absolutely no doubt that if the opportunity presented itself for South Africans to invest in the Springboks, they will do so in the millions,” Karan said. “No South African who loves this investment opportunity, or is passionate about the Springboks, should be excluded from investing at an amount that is affordable to them because the minimum entry point is too expensive.”
The consortium will also make provisions for institutions, venture partners and high-net-worth individuals to own stakes in the commercial rights, as well as floating a debt instrument to attract fixed-income investors, according to a copy of an expression of interest letter submitted to SA Rugby. The sports body acknowledged receipt of the letter, but no further discussions have taken place because of Ackerley’s exclusivity period, Karan said.
The group’s working estimate for the value of the commercial rights entity is at least $375 million, which would put any potential bid it may make at least on par with Ackerley’s, he said. Still, it expects fees and costs to be lower than that of the American company. SA Rugby’s member unions raised concerns about the fee structure and governance aspects of the rejected deal, as well as potential changes to the body’s commercialization and revenue mechanisms.
The governing body, which has barely turned a profit for over a decade, told lawmakers it risks collapse if it doesn’t boost revenue or secure a commercial deal.
The Springboks have won the World Cup a record four times. Once regarded as an emblem of apartheid due to its formerly all-White composition, it’s now seen as an icon of successful racial integration with a Black captain and representatives from most of the country’s largest ethnic and religious groups.
You can follow Bloomberg’s reporting on Africa on WhatsApp. Sign up here.
©2024 Bloomberg L.P.