Why Jimoh Ibrahim Is Staking Billions In National Mirror Newspaper - 2008-09-08

Barrister Jimoh Ibrahim and Prince Emeka Obasi have recorded what could be a landmark 100 percent buyout deal in the Nigerian media industry with the recent purchase of the latter's National Mirror Newspapers by the former, writes O'Lekan Babatunde.

Barrister Jimoh Ibrahim, acclaimed Harvard-trained lawyer turned businessman, penultimate week, bought out fellow businessman, Prince Emeka Obasi, as Publisher/Editor-in-Chief of National Mirror newspapers in preparation to becoming an active player in the Nigerian media space.

Mr. Ibrahim, though a media aficionado from the onset, when he came into the limelight a couple of years ago, had hitherto managed to restrict himself to watching from the industry sidelines while savouring the inherent publicity that comes with fame and relative success. Thanks to his status as a self-proclaimed self-made young entrepreneur with interest across a number of juicy businesses 'pies', Mr. Ibrahim enjoys his share of media presence-sometimes negative but most times positive.

Mega Deal

Some analysts see his bold entry into the media business as a vote of confidence for the industry, as Ibrahim is known to invest only in quick ROI-yielding businesses such as real estate, oil & gas, and telecoms. Others, however, believe that his intervention in the media space is a smart move to protect himself and his businesses in the unpredictable Nigerian business and political environment.

To achieve this, M2 gathered that Mr. Ibrahim coughed out between N1billion to N1.5billion for Prince Obasi to accede to bid.

The Media War on NICON

As Group Managing Director of Global Fleet, Jimoh Ibrahim in his quest to build the greatest insurance empire had bought the NICON, the largest insurance group in the country, from the Bureau of Public Enterprises (BPE). He bought 70% of NICON in 2005. In line with the agreement signed with BPE, the core investor in NICON (that is Jimoh Ibrahim's group) was billed to assume full control after six months after it took initial possession. 

According to another part of the letter of agreement, the government could be allowed to step in only if the company under the new owners becomes insolvent and the investor proves incapable of arresting the slide.

To prove his organisation's capability to run the business, Ibrahim shouted it to high heavens that “when we took over, the liability was N27 billion,” but that as at the end of last year, 2007 when the government wanted to reverse the sale, the liability was less than N7 billion.

 His claims, however, did not stop spirited moves to snatch NICON from Ibrahim, who did not only take legal action to retain ownership of NICON but also put his closeness to the media into play in a bid to win over the court of public opinion in the matter. In the end, Ibrahim's strategy of deploying the power of the media in the battle for NICON yielded dividends with his retaining the control of the insurance behemoth.

The Media Mighties

The media is a key lever of power and this is now more so in this information age, Mr. Chido Nwankanma, CEO of BlueFlower Communications, told M2. This perhaps explains the influx of well-heeled investors into the industry in recent times.

Lately, the Nigerian media landscape has been changing, with a new set of owners investing mega fortunes to secure an enviable place. This new crop of investors is dominated by political barons such as Senator Bola Ahmed Tinubu, former governor of Lagos, who is building a vast media empire that includes radio and television stations, as well as The Nation and National Life newspapers, among other media interests. Others include Chief James Ibori, ex-governor of Delta State, who owns Daily Independent titles, Dr. Orji Uzor Kalu, ex-governor Abia State, who owns The Sun publications, and Otunba Gbenga Daniel, second term incumbent Governor of Ogun State, who has The Westerner and Nigerian Compass to his credit. 

The media's role of setting the agenda for the public makes it very attractive to the political class who can conveniently raise the huge funds needed to place a media organisation on the path of instant success.

The political media moguls mentioned above are closely followed by the religious class as represented by Pastor Chris Oyakhilome, Presiding Pastor, Christ Embassy. Oyakhilome has suddenly developed an unquenchable love for the media business. His group's media investments include MBI, Super Screen TV, National Standard bimonthly magazine and National Daily weekly newspaper.

While the “non-political” publications like Thisday, Punch, Guardian and Vanguard and their broadcast counterparts like Ray Power, MITV and Silverbird still do a good job of their primary role of information, education and entertainment, the obviously aligned media first and foremost promote and protect the interests of their investors because, as the saying goes, he who pays the piper calls the tune.

The Hook for Ibrahim

The hook is consolidation. Having realised the importance of media ownership and the influence it wields, the next stop for him is to own a platform.

According to Mr. Taiwo Obe, CEO, Taijowonukabe and a keen follower of the Nigeria media scene, the insinuation of an ulterior motive behind the National Mirror buyout should not be an issue “as long as this is a legitimate deal involving a  willing seller and a willing buyer.” In any case, Mr. Obe asked, is there a law that says one could not have any motive, ulterior or otherwise, to own a newspaper? Is there a law that debars Ibrahim from owning a newspaper?

Aligning himself with this argument, Mr. Nwankanma declared that Mr. Ibrahim, like every other investor, was free to make investments in the media.

According to a staff of National Mirror, there seems to be enormous enthusiasm and expectations though the mass of the staff are yet to meet with the new owner. According to a correspondent who wants to remain anonymous, “there are a number of promises like better working conditions including better and prompt payment of salaries on or before 25th of every month. There is also the plan to relocate from the present office in Ikeja to Global Fleet House in Lekki.”

Kenneth Madueke, Business Editor of National Mirror, shares this enthusiasm, claiming that the decision by the former publisher to divest is in the interest of all parties. “Things can only become better,” he said.

Willing Seller and Hungry Buyer

Asked for his commentary on the take-over, Chris Uche, Daily Editor, National Mirror, referred the publication to the editorial in its last week Monday's edition aptly titled “A Princely Exit.” The editorial obviously subscribed to Prince Emeka Obasi and Joshua Suleiman, Managing Editor, subtly convey the divestment decision to the general public. The writer of the unsigned editorial page claims: “Last week, he shook hands with us, he (Prince Obasi) and I held each other and he said to me, 'good bye'. It was a princely exit.

“He had laboured so well and fought so hard to keep his newspaper going. He endured the pains of paying salaries, and the shepherdhood of seeing to the needs of employees. It was not an easy task. I understand. … I know, as he himself acknowledged, that it was not the final 'bye'. The world is a circle that you get to the point where you left off.”

Precedence

From a humble beginning as Hallmark Publisher, Prince Obasi left to serve as a Commissioner in Abia State. He returned to Hallmark at the expiration of his tenure but by then the paper had already lost much ground probably due to his absence. Four years later, he rested Hallmark and in its place floated National Mirror.

While a number of publications have been left to die with the founders clinging to sole ownership, by selling National Mirror, Prince Obasi might be laying a precedence that will sooner than later become an acceptable norm in the Nigerian society. Perhaps the only similar change of ownership in the industry is that of Daily Times, where the Federal Government sold off the bulk of its equity interest through the BPE to Fidelis Anosike of Folio Communications.

Selling off a business is not a familiar practice on these shores. Analysts therefore see this present situation of a willing seller and a willing buyer of a fledging media concern coming to a round table and successfully closing the deal (100% equity) as a good omen for the industry.

One industry source has predicted that many of such developments should be expected in the foreseeable future and that ailing media organisations can always take the equity buyout option and return to reckoning. Mr. Nwakanma painted this picture more vividly, stressing that the expected trend could point other investors in the country to the investment possibilities in the news business. “It is,” as he put it, “a sector that could do with more savvy deep pockets entrepreneurs.”