Could have been different

[BdeB]

The Times reporting that Derek Richardson vetoed a possible bid that could have saved the club going into administration and the job losses.

[jamestaylor002]

I haven't read the article but I do hope that it is a balanced report, giving possible reasons for the veto, and isn't an effort to point fingers (and blame) at an individual.

[Neils]

Strange this was reported by the Ruck or somewhere about two weeks ago but nowhere else so thought it might just be a fabrication to suit the scenario. 

Any chance of anyone cut and pasting?

[MarleyWasp]

Wasps owner Derek Richardson vetoed £60m rescue package that could have saved club

‘Lifeboat’ offer might have prevented 167 jobs being lost

REUTERS
Owen Slot, Chief Sports Writer
Friday November 11 2022, 12.30pm, The Times

Wasps rugby club might have been saved had a £60 million rescue package proposal not been rejected only three weeks before the club went into administration.

A “lifeboat” offer was voted on by the board which might have kept the club out of administration and prevented 167 jobs being lost. However, unanimity was required for the bid to proceed and though it was widely popular, there was one man who failed to vote in its favour. That was Derek Richardson, the club owner. Richardson abstained from voting, a decision which immediately killed the proposal.

Wasps were a 155-year-old rugby club and one of the most successful in England since rugby union went professional. They went into administration on October 17, they haven’t played a game since and a large number of the players and the staff remain unemployed. At present, the club have not one single employee and exist only in name.

The rescue bid which might have saved the club was tabled by Hottinger, an international wealth management company, which had a longstanding association with both Wasps and Richardson, a relationship which appears to have soured in the past year. Other board members were astonished that Richardson would nevertheless fail to support the Hottinger offer.

The Hottinger package involved match-funding from Coventry City Council which owns the freehold to the Coventry Arena, where Wasps played their home games. The local authority had not yet signed off on any deal but had been in positive negotiations with Hottinger and were awaiting the green light from the Wasps board before taking the funding proposal to the next stage.

Richardson saved the club when his own takeover rescued them from dire financial straits in 2013. It was Richardson who moved the club from High Wycombe to Coventry. He then raised funds with a £35 million bond scheme which seemed brilliant at the time but which became a lead weight this year when the bond needed to be repaid. It was his inability to repay the bond that ultimately triggered the club’s downfall.

In September, however, the lifeboat opportunity appeared from Hottinger. Richardson had already had a long association with the company. It had looked after his own personal finances for more than a decade. On behalf of other Hottinger clients, it had also invested about £3 million in the club. Before the start of last season, the relationship was still so strong that Hottinger became an official club partner with its name on the right sleeve of the club’s shirt.

Hottinger was also involved in the complicated financial structure in which Wasps sat. Wasps Holdings Limited, which was the club, existed within a holding company, Moonstone, which was based in Malta. Hottinger was engaged as an advisor to Moonstone. One of the directors of Hottinger sat on the Moonstone board.

Last summer, when time was running out on Wasps and the bond repayment, Richardson lost an element of control of Wasps Holdings Ltd when Moonstone changed two of the directors on the board of Wasps, both of whom were seen as allies of Richardson’s. Richardson is understood to have been extremely unhappy that this had been allowed to happen.

As Wasps financial problems became increasingly acute, Hottinger started conversations with Martin Reeves, the chief executive at Coventry City Council about mounting a joint rescue package. Both sides were aware that while they wanted to keep Wasps alive and to continue to have Premiershipship rugby being played at the Coventry Arena, there was a bigger picture here because an investment which involved the Arena could prove exceedingly fruitful as the land around the venue remains ripe for development. Hottinger had already, once, been involved in proposals for a hospital on the site.

By September, Wasps’ debt had grown to £112 million. The Hottinger lifeboat would not have made the club solvent, however, it would have paid off the most urgent debts and allowed the club to continue operating while finding other investors who might have been attracted to the development possibilities of the Arena site.

The Times has seen the executive summary of the bid, a three-page document which offers an “exclusive opportunity” and declares that “the refinance would satisfy outstanding debts to all government or quasi government agencies, refinance the existing public bond issuance and provide capital to begin development of the real estate opportunities”.

Reeves told The Times that Coventry City Council had engaged in “very bona fide conversations” with Hottinger about its proposal. “We were interested. If it had got through on approval at the Wasps board, we would have gone to the Council,” he said. “It would have had a fair chance. If they had said: ‘Yes, the board really likes it’, we would have moved on to the next stage.”

The discussion about the rescue package also included a sweetener for Richardson where he would receive £1 million a year over 20 years. This was perceived to be an offer of an elegant exit. The offer was never written down and Richardson claims that it was never made.

When it came to moving the proposal to the next stage, a unanimous vote in favour was required. At the end of September, when the board voted, every member voted in favour apart from Richardson who decided to abstain.

Richardson told The Times: “At that stage, we were getting inquiries from a lot of people wanting to do deals. It was obvious what was real and what wasn’t real. There were several other deals that were farther down the track and had gone to advanced discussion stages.

“All that we got from Hottinger was a three-page teaser. For a complex business like ours, it’s ridiculous to say there’s a rescue package from a three-page teaser. It would have taken half an hour to put the three-page teaser together. And it could well have distracted more realistic rescue propositions that were being discussed at the time.

“If the board had had a realistic proposition for saving the club and the business, I would have supported that.”

Three and a half weeks after the Hottinger offer hit the dust, Wasps went into administration and the entire staff lost their jobs. It is impossible to say for sure whether the club would have survived had it pursued the Hottinger offer. Nevertheless, it was a potential lifeline and the Wasps board was astonished that they were prevented from grabbing onto it.

Attempts are under way to bring Wasps back next season. If they do return, they would come back into the Championship. However, at present the club has neither a home ground nor any players nor any form of income with which to pay them.

[Neils]

Thanks

[Peej]

One side etc, but what a fucken mess eh?

I wonder if this the offer that Stephen Vaughan was so happy about before everything went south so quickly?

[westwaleswasp]

Whilst there are two sides to every story, this side does not read well for Derek. At all.

[Vespula Vulgaris]

I've spoken to Derek since the club went into administration and I've never heard him sound so upset. He's always been a lovely, upbeat, and positive chap, with a genuine love for Rugby in general and Wasps in particular. To imply, as this article does, that he was happy to see the club go under because of a personal grudge is absolutely obscene. As things stand he is out of pocket by a vast amount of money.

If he says that there was nothing about this that suggested it was a genuine and compelling offer then that's good enough for me.

I'd love to know who on the board it was that decided that this was a story that should be in the papers.

[Bloke in North Dorset]

Richardson told The Times: “At that stage, we were getting inquiries from a lot of people wanting to do deals. It was obvious what was real and what wasn’t real. There were several other deals that were farther down the track and had gone to advanced discussion stages.

“All that we got from Hottinger was a three-page teaser. For a complex business like ours, it’s ridiculous to say there’s a rescue package from a three-page teaser. It would have taken half an hour to put the three-page teaser together. And it could well have distracted more realistic rescue propositions that were being discussed at the time.

If that side is to be believed it wasn’t even Heads of Terms. In which case Derek was probably right. 

I suspect lots of water is going to flow under lots of bridges before we get the real story behind the whole mess, if we ever do.

[Andywasp50]

Very odd, especially given they say Richardson had a good relationship with Hottinger initially. Might also explain LOL's optimism too.

I hold Richardson no malice, I've never met him and he's done some great things for the club and invested his own personal wealth. I have, however, always harboured the thought that the reason he bought Wasps was to use the club as leverage to buy the Ricoh/CBS arena. The move was very sudden and extraordinary, and came soon after Derek had bought the club. He's now also on the ACL side of things but not sure how that will pan out.

There's not much logic to turning down a rescue package like that, but there must be more to it than we know.

[Neils]

I've spoken to Derek since the club went into administration and I've never heard him sound so upset. He's always been a lovely, upbeat, and positive chap, with a genuine love for Rugby in general and Wasps in particular. To imply, as this article does, that he was happy to see the club go under because of a personal grudge is absolutely obscene. As things stand he is out of pocket by a vast amount of money.

If he says that there was nothing about this that suggested it was a genuine and compelling offer then that's good enough for me.

I'd love to know who on the board it was that decided that this was a story that should be in the papers.

VV - Who was on the Board at the end?

[Vespula Vulgaris]

I've spoken to Derek since the club went into administration and I've never heard him sound so upset. He's always been a lovely, upbeat, and positive chap, with a genuine love for Rugby in general and Wasps in particular. To imply, as this article does, that he was happy to see the club go under because of a personal grudge is absolutely obscene. As things stand he is out of pocket by a vast amount of money.

If he says that there was nothing about this that suggested it was a genuine and compelling offer then that's good enough for me.

I'd love to know who on the board it was that decided that this was a story that should be in the papers.

VV - Who was on the Board at the end?

I don't know I'm afraid.

[WonkyWasp]

I'll wave a flag for Derek any day.  That article  reads as one sided, giving some information but skimming lightly over the surface of a lot more. 

[Shugs]

We probably won’t know the context to this in terms of what else was/could have been on the table. What strikes me is 3 sides of A4 and a request that the council match fund are two very limiting factors in this bid being credible.

[Shugs]

I've spoken to Derek since the club went into administration
 and I've never heard him sound so upset. He's always been a lovely, upbeat, and positive chap, with a genuine love for Rugby in general and Wasps in particular. To imply, as this article does, that he was happy to see the club go under because of a personal grudge is absolutely obscene. As things stand he is out of pocket by a vast amount of money.

If he says that there was nothing about this that suggested it was a genuine and compelling offer then that's good enough for me.

I'd love to know who on the board it was that decided that this was a story that should be in the papers.

Feel free to not disclose VV but I take it his involvement in Wasps is basically at an end from his point of view? Mention of a former owner being involved did come up in terms of “the rescue party”.