OIL MAGNATE CHIEF JIMOH IBRAHIM FAILS IN BID TO BUY VGC COMMUNICATIONS
The attempt by Lagos oil magnate, Chief Jimoh Ibrahim to buy over wireline operator, VGC Communications has collapsed.
VGC Comm sources told that the deal was called off by the owners of VGC when Ibrahim did not fulfil his obligations under the terms of the agreement. According to a VGC Comm source, the deal which had a lifetime of December 31, 2005, was considered dead when Ibrahim chose not to make full payment for the telecommunications company by that date. He had offered earlier offered to buy the company for US$100 million.
The Group Deputy Managing Director (Legal) for Globe International Holdings, the owner of VGC Comm, Mr. Dele Martins confirmed that the company had given Ibrahim a deadline to come up with full payment which he was unable to do.
According to Martins, the proposed buyer, Ibrahim, would not come up with full payment at at December 31, 2005 when the deadline for payment expired. As a result, the deal was called off. "The deal collapsed. It is completely off," Martins told.
No VGC Comm source would volunteer any information on why Ibrahim did not make the required payment in stipulated time.
Martins told, "there is no obligation for us to sell to him. There is no obligation for him to buy from us either. The deal is completely off. It is as simple as that."
He however did not rule out any possibility of selling to Ibrahim in the future if he was interested and if the company was still available for sale and if the management was still eager to sell.
However in his own reaction, Ibrahim told THISDAY that it was not true that Globe International called off the deal because he was unable to pay.
According to him, he already paid the full amount into an escrow account in an Israeli bank according to the requirements of the agreement. He said that going by the agreement, each party had till March 31, 2006, to opt out of the deal if he so chooses.
The former ANPP governorship candidate in Ondo state insisted that money was paid into the said account in time adding that the first deadline was 30 days, then another 60 days, and that he chose to withdraw because along the line, he found out that the company was too expensive for that price.
He also claimed the operator did not have some of the facilities it claimed to have before he entered into the deal.
In fact, Ibrahim made reference to a news report of November 17, 2005 with the title: "VGC Overpriced at US$100 Million" in his assertion that the company was overpriced.
But asked if he did not do his due diligence before offering that much for the company, moreso since business decisions are not taken based on newspapers write-ups, Ibrahim said he did, but added that the earlier due diligence was done based on the information supplied by the company. On entering the company after the sale however, he said his team conducted another due diligence where it was found that the VGC did not have all the infrastructures it claimed it had.
Ibrahim also pointed out that he then reasoned that it would make much sense to buy NITEL than to buy VGC for that amount. Asked if he was aware that NITEL has now been sold, the oil magnate said, he also learnt that the NITEL bid had been cancelled.
The cancellation of the deal would mean a little setback for VGC Comm and its management since it had been inactive for sometime while negotiations and the wait for payment to be effected lasted. All these while, its decision making body had been inactive. Staff had been disillusioned uncertain of what may happen next. With the collapse of the deal, the management of the company had to go back to where it left off and would in the process of that had dropped some vital points to the competitors which did not have the kind of interregnum VGC had.