A multi-million pound bid from the Welsh Rugby Union to acquire Cardiff Arms Park has been rejected.

It comes after the management committee of Cardiff Athletic Club met last night to consider a detailed proposal from the union to acquire the freehold interest in the ground, which adjoins the Principality Stadium in the centre of Cardiff.

They voted not to put the offer, which is believed to have been in the region of £17.5m with an upfront payment of £5m (which would have been subject to capital gains tax), to its members through the calling of an extraordinary general meeting.

The committee decided it couldn't countenance the sale of the freehold interest in the ground, whose tenant is Cardiff Blues Ltd that runs the professional rugby region the Cardiff Blues and semi-professional side Cardiff RFC.

The current lease between the rugby company and its landlord the athletic club, expires in 2022.

The athletic club is made of the sporting sections of rugby, bowls, hockey, tennis and cricket. On membership the rugby section is the largest.

Plans by Cardiff Blues to redevelop the ground, through the striking of a new long-term lease with development rights with the athletic club, recently floundered after years of discussions - although the Blues' position is that it's offer still stands.

This led the WRU, which under previous chief executive Roger Lewis also had plans to acquire the Arms Park, to enter into fresh talks with the athletic club in the last few months.

At the end of the proposed long-term repayment period between the WRU and the athletic club, the freehold interest in the ground would have been transferred over to the union.

Can a deal still happen?

The question now is whether a deal can be salvaged, but it is unlikely that the WRU would be interested in acquiring a long-term ground lease interest instead.

And even if it was, it could mean a new offer far less than the current freehold acquiring one of £17.5m.

How will members of the athletic club feel about not being able to consider the offer after the decision of the management committee?

Could it leave open the prospect, providing enough members supported it, for the calling of an EGM to vote on the union's £17.5m offer?

However, with the management committee having decisively voted to reject the offer from the WRU, the wider membership could easily go the same way.

The union wouldn't want to get involved in that, besides it has a number of other pressing projects to get on with, including a new governance and funding arrangement with the four rugby regions, under the proposed Project Reset, and plans to redevelop Rodney Parade.

The Arms Park is in need of upgrading having been built in the early 1970s.

If the athletic club don't want to agree a long-term lease deal with the Blues, in which it has a 25% stake, or selling of the freehold interest in the Arms Park to the WRU, what is it going to do?

The Blues' offer for a new lease deal has not gone away and they would be happy to get around the table again if the athletic club were minded to do so. But the management committee has ruled that out.

To give parties breathing space a short extension to the current lease could be agreed.

It is understood that a condition of Project Reset is the Cardiff Blues has surety of stadium for five years. It currently doesn't have that.

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Or the athletic club could look to develop the ground themselves, potentially by bringing a commercial development partner on board for office and residential developments around a revamped or new stadium.

But whatever the deal, it would need final sign off from the trustees of the athletic club.