Worcester Warriors rescue deal rejected by RFU as Wasps takeover approved

Worcester Warriors rescue deal rejected by RFU as Wasps takeover approved

Wasps will take their place in the Championship next season after their takeover was approved by the Rugby Football Union, but Worcester will not be joining them unless they find new buyers.

Atlas Worcester Warriors Rugby Club Ltd, the consortium led by the club’s former chief executive Jim O’Toole, has seen its bid rejected on the grounds of its refusal to meet the conditions set by the RFU.

The English game’s governing body said it will instead work with Worcester’s administrator Begbies Traynor to enable alternative bids in the hope of preserving professional rugby at Sixways.

Worcester Warriors rescue deal rejected by RFU as Wasps takeover approved

Worcester entered administration earlier in the season (David Davies/PA)

An RFU board meeting on Friday morning ratified the regulatory assessment of the prospective owners, which was undertaken by the ‘Club Financial Viability Group’.

Included within this were reviews of financial information, considerations of the bidders and their business plans for the clubs and external background checks in order to understand the level of risk involved.

Wasps and Worcester entered administration earlier in the season, resulting in their expulsion from the Gallagher Premiership.

If approved by the RFU, any new buyers would be able to relaunch the club in the second tier Championship, thereby ensuring their survival as professional entities.

The consortium seeking to buy Wasps, which includes members of Wasps Legends, were given the green light subject to several conditions being met.

These include financial commitments to ensure that the club remains funded, the lodging of a significant bond and the swift payment of rugby creditors.

However, Worcester’s buyers said they were unwilling to meet the conditions requested of them, including not disposing of the land around the stadium and swift payment of rugby creditors.

Worcester may have played their last professional game

Worcester may have played their last professional game (Zac Goodwin/PA)

A RFU statement read: “The RFU board was also not satisfied with the information provided, in particular relating to the financial position of the buyer and their ability to continue to fund the club and to deliver on the business plan provided which included significant development at the Sixways site.

“Evidence of a non-binding heads of terms for external off-shore financing has been provided, but this is not committed.

“For these reasons the RFU does not have comfort that the business plan can be funded, nor that rugby is at the centre of the proposal for the business which is an American medical services company.

“The RFU is also concerned by the public statement from the bidders that they are prepared to acquire the site and develop it without a rugby offering.”

Begbies Traynor joint administrator Julie Palmer responded to the RFU’s decision by stating they are open to discussions with any interested party, although any offer must equal or exceed that of Atlas due to their obligation to creditors.

“We have also offered an urgent meeting over the weekend between the RFU and Atlas Worcester Warriors to try and resolve the position,” Palmer said.

In what was seen as a pre-emptive strike before the RFU’s decision, Atlas on Thursday released a statement accusing Twickenham of “seeking to impose onerous operational conditions”, thereby hindering “any commercial business that is needed to support elite men’s and women’s rugby”.

Former Worcester director of rugby Steve Diamond has said that the consortium he is fronting remains interested.

Having received approval from the RFU, Wasps’ new owners HALO22 announced they had reached a groundshare agreement at an as-yet unnamed Midlands venue. Wasps uprooted from London to Coventry in 2014.

Atlas said it was considering legal action against the RFU.

“The investors are dismayed that after willingly accommodating intrusive questioning about confidential business information, a major UK sports governing body can apparently misrepresent so blatantly the result of that collaboration,” said a statement from O’Toole.

“It is a considerable overreach on the part of the RFU to propose that the administrators negotiate with other bidders whose propositions were originally deemed insufficient versus the Atlas offer.

“Atlas will continue to work with the administrators to conclude the purchase transaction as swiftly as possible and continue to keep rugby and the community at the forefront of our plans.

“Atlas and it’s investors are now reviewing legal options in connection with challenging the conduct of the RFU in this process.”