ARL now leads bidding race to take over NRL club
Auckland Rugby League has moved in to the box seat to buy the Warriors, even though it is offering less money.
The Richard Fale-led consortium is willing to offer as much as $24 million, $4 million less than the cash offer the Auckland Rugby League bid, to purchase the NRL club.
However, a significant difference between the two bids is the way the sale happens.
The current owners want to do a share sale of the club and this way the new owner would come in and take over all the existing contracts the organisation has.
But the Fale group is not happy with this and wants to do an asset acquisition, which means buying what the club owns, rather than shares of the company running the club, Warriors Management Limited.
The buyer acquires only the assets and liabilities it wants to in an asset sale.
This is different from a stock acquisition where the buyer acquires all the assets and liabilities, including unknown or undisclosed liabilities and it could be deemed there’s more risk with this.
The Fale group wants more certainty that down the line, it will not be hit with any surprise liabilities attached to the club.
But it is understood that this isn’t something the ARL is concerned about.
Even so, the Fale group is pressing ahead with its bid and will put a formal offer on the table this weekend.
‘‘Everything is going fine, we’re going to be throwing the purchasing agreement on the table either today or tomorrow and then we’ll see what the response is from Eric Watson and those guys,’’ Fale said.
‘‘We still do have a bit of disagreement on the structure of the purchase.
‘‘It’s a matter of whether it’s going to be a share sale or an asset acquisition and we still haven’t solved that question yet.’’
An issue the current owners have with an asset sale is that it is a long process to transfer every asset the club has from the current organisation, Warriors Management Limited, to the Richard Fale fronted company.
So for every sponsor the Warriors have, a new contract would need to be signed with the new owners. There would also need to be a new deal done with the NRL.
‘‘It does take a little longer and there are additional costs,’’ Fale acknowledged.
‘‘But we’ve told them we would eat those costs related to the share acquisition, because you have to hire lawyers and attorneys, but we would cover all of that.
‘‘But they’re still pretty insistent against that. They said it’s going to take too long.’’
The Sunday Star Times understands that Watson would rather make a quick sale for less money, than go through the longer process of an asset acquisition and because of this, the ARL has increased its chances of being the next owner of the New Zealandbased NRL club.
However, there are still a couple of other parties that have kept their identities quiet who are still talking to Warriors management and if Watson doesn’t get the deal he’s after, he is willing to keep the club for at least another year.