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Financier returns to New York after meetings to buy stake in EP Rugby

There was “cloak and dagger” intrigue when American businessman Douglas Schoninger flew into South Africa on Sunday to begin negotiations to buy a 74% stake in the troubled EP Rugby Union.

It was meant to be a secret visit and nobody, apart from rugby’s bigwigs, were supposed to know that the New York financier was in Cape Town to make his move.

However, the presence of the boss of Pro Rugby North America at the colonial-style Cullinan Hotel on Cape Town’s waterfront would not go unnoticed.

Clearly, SA Rugby did not want anyone to know about the talks and president Mark Alexander referred all questions to his media department.

Usually the rugby grapevine is buzzing, but this time everybody was staying shtum.

They were clearly worried about excommunication from the inner circles of South Africa’s closely-knit rugby family for being loose-lipped. Well, almost everybody. Even the architect of the “American Alliance”, Tony McKeever, would not comment on a move which has the potential to put the cash-strapped EP Rugby Union back on its feet.

McKeever said that a “news blackout” had been agreed by Schoninger and SA Rugby because of the sensitive nature of the talks.

Saru spokesman Andy Colquhoun said they did not give a running commentary on their operations when asked about Schoninger’s trip.

However, bits and pieces about Schoninger’s secret visit slowly started to leak out and this information showed just how serious the American was about sealing a deal.

Schoninger also had an informal meeting at the invitation of Alexander at a braai at the Cullinan Hotel on Sunday.

Last year Schoninger met Alexander in London, when talk of his interest in buying a stake in EP Rugby first surfaced.

Alexander has said previously that the increase in private stakeholding in provincial unions had “attracted a lot of interest both locally and abroad”.

“We’ve asked them to hold off until we’ve put the model in place but the guys want to talk now,” Alexander said.

Although SA Rugby and McKeever threw a veil of secrecy over the meetings with the liquidator, it is believed that a deal could be struck next week.

One of the liquidators, Danie Acker, confirmed that negotiations were under way with interested parties. “I am currently not at liberty to give detailed information,” Acker said.

“Yes, we are talking to interested parties.

“We are positive that a deal is possible, but I cannot disclose names or more than that. Hopefully we will be able to give more information by next week.”

Insiders said the terms and conditions of the acquisition of 74% of EP Rugby Pty Ltd and its commercial rights were discussed between Schoninger and the liquidator.

Sources said a sticking point to any deal, which will need Sanzaar approval, is that Schoninger wants the Kings entrenched in Super Rugby until 2020.

He also wants the EP Kings to be included in the top-flight Currie Cup Premier Division and not relegated to the lower First Division.

But it is believed that nobody could give Schoninger any guarantees about the future status of the Kings and this concerned him.

Sanzaar are only meeting in March to decide on the structure of Super Rugby beyond 2017, and this was probably the reason why an agreement was not signed while the American was still in town.

Sources said the plans for a Kings takeover were so advanced that new-look jerseys had been designed for the team to play in.

The Cape Town meetings took place less than four weeks before the Southern Kings play their opening Super Rugby match against the Jaguares in Port Elizabeth on February 25. Only last month, SA Rugby downplayed reports that Schoninger was interested in buying a stake in the Kings.

News of the American Alliance first broke on November 4 last year when it emerged that Schoninger had written a letter to SA Rugby chief executive Jurie Roux expressing his interest in EP Rugby.

Earlier, Schoninger had applauded SA Rugby for increasing the private ownership stake in South African Super Rugby franchises to 74%.

This decision, taken last year, appeared to have boosted plans for a proposed American Alliance.

Weekend Post is in possession of a letter Schoninger wrote to Roux in which he said a unique opportunity existed to form a strategic alliance between Saru, the Nelson Mandela Bay Municipality and Pro Rugby North America.

Schoninger flew back to New York on Tuesday and said he could not comment on the talks.

Because he could not get key guarantees, the American may be less bullish about sealing a deal than when he first landed in South Africa.

-heraldlive

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