Watson considers Warriors share offer as ownership wrangle continues

Sir Owen Glenn
Eric Watson

Eric Watson has hinted at offering Warriors’ members shares in their club as a solution to an ownership row between him and Sir Owen Glenn.

The Warriors co-owner said yesterday he was open to the idea of selling shares to the more than 9000 Warriors Club members after confirming he was committed to buying out Sir Owen trust’s half share, which was bought for over $6 million in 2012.

“We have a lot of members and they are the people we owe the first duty to in many ways,” Mr Watson told the Sunday Star Times.

“Would they like to have a financial involvement in the club? Look, if that made sense, well, the Broncos are publicly listed. I’d have no problem with that at all if that made sense. Whatever is best for the Warriors.”

What wasn’t mentioned is the fact that Mr Watson is currently a defendant to civil proceedings filed against him by the Financial Markets Authority in relation to the failure of Hanover Finance and related companies.

In 2012 the FMA launched proceedings against former Hanover directors and Mr Watson as a promoter over alleged misleading or untrue statements made in offer documents.

The proceedings relate to new investments and reinvestments at Hanover Finance and sister companies Hanover Capital and United Finance totalling $35 million, a small slice of the $554 million of investor deposits frozen in July 2008. Mr Watson was never a director of those companies.

In February, it emerged in the Auckland High Court that the Hanover individuals had entered settlement talks with the FMA.

Mr Watson told the Sunday Star Times he was happy to get an independent valuation for the Warriors after Sir Owen accused him of trying to buy the stake back cheaply.

He has reportedly offered Sir Owen $1 million for his stake.

Sir Owen had purchased his shares from Mr Watson and Hanover co-founder Mark Hotchin for just over $6 million.

It is understood Messrs Watson and Hotchin paid very little when they took over the Warriors ownership in 2000 on the promise of injecting substantial funds.

According to former Warriors chief executive Trevor McKewen, the pair bought the club and its assets (excluding debt) for $1 while convincing the NRL to liquidate the players’ contracts so they could renegotiate them at a lower rate.

Mr McKewen, who is Fairfax Media’s head of sport, wrote yesterday that any prospectus issued for shares in the Warriors would make interesting reading.

“Watson likes to talk about how he’s never taken a cent from the Warriors and if a float goes ahead, he can put his money where his mouth is by opening up the books and showing us what happens with all the cash the club generates.”

Mr McKewen calculates that, even run poorly, the club should never lose money in any year.

“Even in a dud year, there is at least $12 million, and possibly as much as $15 million, coming in the door.”

Mr Watson and Sir Owen’s ownership battle came to a head last week over the sacking of coach Matthew Elliott.

Sir Owen called for an independent review of the club while emphasising he wants out because he didn’t have “any confidence or trust in the management of the company.”

He told Radio New Zealand his relationship with Mr Watson had "deteriorated to the point of confrontation" and claimed "Mr Watson wants total control ... dictatorship."

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