RFU issue decision on Wasps and reject Worcester application

The Rugby Football Union have issued their decision on bids to take over both Wasps and Worcester Warriors by their respective consortiums.

Both Gallagher Premiership clubs collapsed financially within the first six weeks of the season, with administrators for both sides putting forward their preferred bidders to the RFU for the union’s Club Financial Viability Group to review, which included a look at their business plans, financial information and external background checks in order to “understand the level of risk with each proposed bid”.

The RFU have effectively rejected Worcester’s application, as they say Atlas Worcester Warriors RFC Limited have said they are unable to meet the conditions the RFU have stipulated for the application to be accepted.

It means Wasps will enter the RFU Championship, England’s second flight, while Worcester Warriors are effectively left in the wilderness.

A statement reads: “The RFU Board concluded that the application for Wasps was approved subject to a number of specific conditions being met and that it would continue to work with the bidders through the satisfaction of those conditions over the coming weeks.”

Wasps’ bid does not include the women’s team which is a separate club and which will continue to play as part of the amateur club, Wasps FC, at Twyford Avenue.

“These include a range of financial commitments to ensure that the club remains funded, the lodging of a significant bond, the regular provision of financial and other information, swift payment of rugby creditors, and corporate governance requirements including relating to the club’s board of directors and risk management process.”

As foreshadowed by comments by Atlas Worcester Warriors RFC Limited yesterday evening, their bid has effectively been turned down as they were unable to meet the conditions imposed by the RFU.

“The RFU put forward a number of conditions that the bidders for Worcester Warriors would need to meet to protect against the particular concerns relating to the club and what had emerged through the due diligence process.

“These include commitments not to dispose of the land around the stadium, thereby securing it for the club and the local rugby community, swift payment of rugby creditors and other key governance conditions, including relating to the club’s board of directors and risk management process. The bidders, selected by the administrators of the insolvent WRFC Trading Limited, have informed us that they are not prepared to meet these conditions, and therefore the RFU Board was unable to approve their application.

“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.

“The RFU has not been provided with sufficient evidence of funding. While some information has been provided, this has been only internal P&L information which appears to cover only part of the business of the main shareholder and the RFU was told that no further information could or would be provided. This means that there is no information as to debt levels or shareholder funds and no externally verified financial statements have been provided. 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.”

The decision may open the door for Steve Diamond’s bid to take over the club, a move which is backed by Adam Hewitt.

RFU CEO, Bill Sweeney, said: “We are pleased to be able to proceed with the approval for Wasps and thank the bid team and the administrator for the open and collaborative approach working with us through the process.

“We understand that the decision will not be the news that Worcester Warriors’ former staff, players and fans will want to hear; the best long-term interests of the club and rugby in Worcester is our key priority.

“In the coming days we will be in touch with the administrator to discuss other bid options as our goal remains to support the continuation of the rugby club in Worcester. We are prepared to extend the deadlines to explore if an alternative bidder can be found who has the continuation of rugby in Worcester central to its business plan.”