There are strong indications that the acquisition deal entered into by AfribankNigeria Plc and Vine Capital Group may have been aborted as the two parties failed to make progress to the next stage of the relationship which is recognised as the only legal backbone to the multibillion naira deal.
The deal hit the rocks as Afribank management raised issues bothering on impropriety and reputation which forced the apex bank to initiate an investigation by the Economic and Financial Crimes Commission (EFCC). The investigation was believed to have involved an alleged repurchasing order scam(repos) undertaken by some of the executives who have interests in the on-going acquisition.
Sources close to the Central Bank of Nigeria (CBN) indicated that the apex bank refused to sign the Transaction Implementation Agreement (TIA), indicating that the group was not able to scale through the critical stage of the deal which would have ushered it into the ownership of the commercial bank which few weeks ago embarked on a N20 billion IT infrastructure development project even as it had been battling to survive.
Strong banking industry sources have indicated that the development may have sent some wrong signals about the planned acquisition of the bailed-out banks to the world because the Afribank deal with Vine Capital has been sold to investors beyond the Nigerian shares.
This development is coming at a time when Vine Capital had almost concluded recruitment of its key staff and had put them in readiness for work.
Our investigations revealed that CBN’s refusal to sign the TIA may not have anything to do with the impression that the group is made up of a collage of investors whose origins have been traced to Benin City, South-South Nigeria.
Analysts said the CBN may now revert to status quo ante where a new generation commercial bank recently ranked as one of the top 10 retail and corporate banking financial institutions in the country would assume a preferred position.
Luck started running out for the Vine Group when the executives of the interim management board of Afribank decided to participate in the bid as investors but could not muster enough financial muscle and could not be brought into the Vine Capital arrangement. When the management bid failed, it was obvious there may be some uncanny revelations that may stall the deal. The failure of Afribank’s petition against some executive directors assumed to have been owing the bank a lot was believed to have been the major source of discontent in the merger, especially as the executive directors became favourably disposed to the Vine Capital deal.
Though the management bid failed, there is the impression within the CBN that top officials of the Afribank board may be made to assume a very top position if the bank is finally acquired by any investor.
Among the rescued banks that have signed any form of understanding with any investor, advancement to the critical part called TIP has not been implemented and this has continued to raise questions about the reality of the agreements. Union Bank Plc, which was the first to sign an MOA with African Capital Alliance has not made any further progress. Few weeks ago, foreign partners of African Alliance (known as OPIC) who met with the unionexecutives of the bank were visibly shocked at the revelation made to them. They told the union members that they would get back to them.