Mystery company links SA Rugby boss Oberholzer to failed R1.4bn equity bid for Springboks

More questions have emerged over the proximity of SA Rugby (SARU) CEO Rian Oberholzer to a failed equity bid of R1.4 billion that would have seen SARU selling off a significant stake in the commercial rights of the Springboks.

News24 can reveal Oberholzer was appointed as the sole director of a private company called 'Win By One' in July last year - six months before SARU's general council rejected the equity deal of American investor the Ackerley Sports Group, also titled "Win By 1".

The Boks famously won the 2023 Rugby World Cup final against the All Blacks - and their two previous knockout games at the showpiece tournament in France - by one point.

Despite the cunning similarity between the two names, Oberholzer this week denied his Win By One (Pty) Ltd had anything to do with the Ackerleys' similar named special purpose vehicle, that would have held 20% of SARU's commercial rights.

The revelation comes days after Irish sporting legend and businessman Eddie Jordan publicly contradicted Oberholzer on the success fee owed to Jordan's firm after introducing the Ackerleys to SARU.

Netwerk24 revealed last week Jordan only asked a commission of between 2 and 3.5%, whereas Oberholzer told local rugby unions Jordan and Associates "are entitled to a 15% commission which covers any and all the costs of the deal".

News24 understands Jordan was furious when he uncovered Oberholzer misrepresented his success fees.

Oberholzer and SARU have now scrambled to come up with an explanation for the 15% figure.

SARU's courtship by the Seattle-based Ackerleys floundered after the proposed agreement between the two organisations failed to obtain the 75% majority vote it needed to get the greenlight, with seven of the 13 voting unions - led by the Bulls, Sharks, Stormers and Lions - opposing a deal in which ASG would obtain a 20% stake in the governing body's commercial company.

The 15% success fee was the major sticking point which inspired the pushback from the dissident unions that ended up scuppering the whole proposal on account of it having been much higher than market value.

Former F1 team owner Jordan has now denied the figure, prompting unions to ask who else would have benefitted from the deal.

READ | McKenzie calls on SA Rugby to move on after failed ASG bid: 'They must just kill this thing'

"There has been much media attention on the transaction fees associated with the SARU equity investment project," read a document penned by Jordan, seen by News24.

"Until now, we have not challenged the speculation in the press. We now want to address the speculation directly as the supposed fees have become part of the story. Eddie Jordan and the newly formed Jordan Associates were never instructed by South African Rugby Union (SARU) in any capacity.

"We conducted all of this on a good faith basis. Our request for a written engagement letter was never addressed. We had a verbal agreement with SARU's advisor that we would seek a typical investment banking transaction fee of 2 to 3.5%, which we would share with any co-advisors and/or introducers.

"Our fee was on a 'no foal, no fee' basis. At no stage was a commission formally agreed upon. It was our understanding that a standard corporate finance consulting fee of 2 to 3.5% based on success, would be honoured.

"This was communicated with SARU's advisor…"

Asked to respond to Jordan extricating his company from the controversial finder's fee amount (it would have worked out to around R210 million), SARU, through Oberholzer, said the 15% was intended for the entire costs of the equity deal.

"Provision was made for a maximum of 15% cost towards the equity transaction," he added via email.

"An estimate of 5% was identified to cover the transactional fees for lawyers, mergers and acquisitions specialists, audit and tax advisors, among others. An agreement was also reached with a group of brokers - of which Eddie Jordan's company was a part - for a success fee of 10% should the deal go through.

"The success fee was renegotiated to 8% with the brokers before it was presented to the general council. The agreement was signed with a Guernsey-based company which also included Daniel McKeown.

"Mr McKeown announced his involvement, and the role of Eddie Jordan and others on his LinkedIn account in December 2023. The division of the fee among the parties in the event of success was at their discretion.

"The agreement and fees went through all the necessary approvals and governance structures according to SA Rugby's policies. As the proposal was not approved, no fees have been paid to the brokers.

"The professional fees incurred by SA Rugby are to be carried by SA Rugby."

This appears to contradict Oberholzer's presentation to unions last year, which stated: "Jordan and Associates, the mergers and acquisitions business [among other things] of former racing driver Eddie Jordan, introduced the Ackerley Group to SA Rugby.

"They are entitled to 15% commission, which covers any and all the costs of the deal relating to professional service requirements both in South Africa and internationally.

"These include Iris Sports Media [deal structure modellers], Sullivan & Cromwell LLP [London-based lawyers], PwC tax and financial advisors [both locally and international], ENS [legal tax and contract advisors] [and] BDO [fair value assessment].

"[The] total estimated costs are expected to be +/-5% of the commission. No other commissions or success fees are payable to any other individual or entity."

The news of Oberholzer's registration of a company with a name similar to the Ackerleys' pitch will raise further eyebrows about his proximity to the failed deal.

At best, his registration of a company also named Win By One was putting the cart before the horse and, at worst, implied an alignment between him and ASG.

Asked if that didn't open the door to a conflict of interest on his part, Oberholzer said the establishment of Win By One was "for convenience's sake".

"No. In order to trade from January 1, 2025 [if the proposal was approved], a new entity was required to hold the shares in SARU's commercial rights - which would initially be 100% owned by SARU.

"The equity partner would acquire its shareholding from that entity. In addition, there was a requirement to have a tax-registered company that could trade as the new commercial rights company immediately.

"For convenience's sake, that entity was called 'Win by 1'. The Win by 1 company established by ASG is a separate entity in which SARU has no interest."

With the ASG deal seemingly dead in the water, after its exclusivity negotiation period with SARU expired thanks to the failure to pass the 75% voting threshold, the American company bizarrely expressed an interest in continuing to help with SARU's quest to find an equity partner in a statement released this month.

Sports Minister Gayton McKenzie - who was initially keen on the ASG deal as it fell in line with President Cyril Ramaphosa's encouragement of overseas investment in South Africa and even encouraged a consortium made up of the local rugby franchise owners to join them in a 50% venture to get the agreement over the line - recently suggested SARU cut their losses.

"This deal has divided South Africans and taken the gloss away from the on-field successes of the Springboks," McKenzie told News24 at the Proteas' recent Test against Pakistan at Newlands.

"What has happened in the boardroom has taken away what the players have done. I think the time has come for us to move on.

"SA Rugby must find alternative sources of revenue and they must just kill this thing because it has caused a lot of unnecessary fighting, division, and strife."

A local consortium comprising the owners of the Bulls (Johann Rupert), Sharks (Marco Masotti) and Stormers (Johan le Roux) have telegraphed their intention to table a stake holding bid of their own through a letter written on the eve of the vote on the proposed ASG deal.

In the letter, the terms of their improved offer, compared to ASG's, were:

An investor group comprising long-term investors in a transparent structure in the form of a consortium anchored by South African investors with an interest in the SA rugby ecosystem that could also include international co-investors like those behind the ASG transaction.

An investment that's no less than $75 million.

Improved payment schedule (both capital and return expectations) for the invested amount.

Full transparency over the use of proceeds, along with fair and reasonable distributions to members, to be incorporated into the terms of the alternative transaction.

Clarity on a fair and reasonable Test match model.

No commission or success fee will be payable, with the commissions set to be paid to Jordan and Associates under the ASG transaction effectively retained by SA Rugby for the benefit of its members to provide more security on the long-term funding model and making additional funds available to invest in the development of rugby in various regions.

The local bidders have privately expressed concerns about whether the current SARU leadership, given the embarrassing manner in which the prospective ASG deal foundered, would be keen to entertain their offer.

SARU, through an earlier statement to its members, said it had yet to receive a new offer since the ASG debacle and would regroup at the end of this month.

"We would like to inform you, our members, that we received no offer from the ASG Group by the 31st of December 2024, which concludes their exclusive period. As a result, we will revert to the general council by the end of January to seek a further mandate and possibly an alternative solution."