The story is everywhere on the internet how Paddy Adenuga, the son of Nigeria’s telecoms and oil & gas business mogul where he nearly and almost bought Chevron, Netherlands.
He got guts, passionate, ambitious and he was ready to go to the moon even without a ride. He played the chess and played it well in the traditional ways.
Well, the story has been told, there is history and name made by Paddy already but we can’t shy away from the fact that the acquisition was not successful. He failed! What guts he got and why he failed?
EGO KILLED HIM
Paddy said “I pitched Catalan to Edgar and how if we pulled this off it would be the grandest of coups. Edgar was highly intrigued but stated that he wanted hard cash upfront from the onset. Whilst the others were all too eager to come on board and make their money via sweat equity or cash incentives when we had a target company in our sights, Edgar wanted to be paid money and a substantial amount before putting pen to paper. I was confused by his behaviour. I told him who the others were that were on Catalan’s advisory board but he wasn’t having it, either he would be paid his princely sum to attach his name to Catalan or no deal. I was 29 at the time and was still head-strong and prideful. How could this guy develop such an attitude? I thought we were friends. I suppose Edgar knew his value and wasn’t going to mortgage it on a promise of monies at a later date. As much as he liked my Trojan Horse idea, he just happened to like money more. I balked at his request in annoyance. I paid for lunch, told him no way, and stormed off home. This was a big mistake on my part that would rear its ugly head later.”
Edgar who is a professional that has lot of experience and the connections to pull through the Chevron acquisition to Catalan which Paddy also testified to backed out from joining the Catalan Bid team because Paddy was arrogantly couldn’t accept or negotiate his interest but he thought Edgar liked money. He admitted it was a big mistake from his own part not accepting or negotiating with Edgar because that was the beginning of his failure and before he realized, it was too late.
Paddy said “I had to reach out to Edgar and I’d also have to pay that princely sum of his. I met with Edgar for a steak dinner. I swallowed my pride and apologised profusely for our last meeting that didn’t go so well. I told Edgar that I wanted him on my team now on a full-time basis. Edgar knew he was needed now more than ever and cheekily asked for twice the amount he had originally requested for. This was no longer a princely sum but a king’s ransom. I did the math. It was worth it. I called my Bankers and made sure Edgar was paid. After everything failed, Edgar later told me that if I had brought him on from day one, the first question he would have asked me was, “What amount are you willing to pay for Chevron Netherlands, given what you wanted to use it for in Africa?” I told Edgar that the price I would have paid was USD 50 million. I should have paid Edgar his princely sum the first-time round, never again would I let ego or pride cloud my judgement.”
He had to pay doubled for Edgar and still did not win the bid. That is was the consequence of his ego and pride. In business, ego and pride don’t have place instead negotiate.
HE HELD IT TOO SECRETLY
” That night I went on a dinner date and bumped into an older friend of mine, Remi. I had always looked up to Remi. Remi is smart, successful, and highly intelligent. I felt like him and I were very much the same person and that he was me, just twenty or so years down the road. Remi asked me what I was up to with work and why I wasn’t in Lagos running the family business. I coyly changed topics as I didn’t want any Nigerians knowing what I was up to, certainly no one in “high society” or the political elite. Even though Remi was a great guy, I couldn’t take the risk. Chevron Netherlands was my Trojan Horse and it was on a strictly need to know basis. We will get back to Remi later.”
After everything failed, the Managing Director of Petrogas of Oman, the mystery company Paddy used most of later time to search that has the highest bidding and that acquired the Chevron company happens to be a close friend of Remi.
Paddy said “I called Remi and told him that I was back in Lagos. He invited me over to his palatial and modern home. He liked my Lion’s head insignia that I had stitched onto the pocket of my native Nigerian kaftan. We sat down for hours and talked business and politics. Then Remi asked me what was I doing in London all that time, away from the family business. I was happy to tell him about Chevron Netherlands at this point, the deal was done and over. Remi looked at me in astonishment, “You mean you took on a whole Chevron, with no noise, no fanfare and none of us knew? Ahh bros you try!” We laughed it off. Remi then revealed the biggest bombshell of my Chevron Netherlands adventure. The managing director of Petrogas of Oman was a close friend of his and he knew he was bidding for Chevron Netherlands at the time. If I had told him what I was up to when we saw in London, whilst I was searching for the last bidder, he would have introduced us. I was blown away. There it was that whole time. That mystery last bidder that I had searched so hard for was there for my taking and it passed right by me.”
Whooo! What would have happened if he told Remi and Remi speak with his friend at Petrogas of Oman would have be.. Instead of the Joint Venture he had with ONE and EBN, it should have be with Petrogas of Oman or he just play his chess in anyway anyway.
HIS TEAM DID’NT BELIEVE HIS INSTINCTS
This is very dangerous for any business when your team don’t believe your belief or instincts. Did he have a bad team? No but they simply can’t believe his lame ideas because they are professionals.
Paddy said “I countered that we needed to be aggressive and should take the entire abandex and offer cash of USD 50 million so that we could acquire Chevron Netherlands uncontested and plough quickly to our Africa strategy.
The Catalan management team thought I was crazy. Surely, I was 29 and now undeniably stupid. How could I look at that enormity of an abandex amount and now want to offer hard-earned cash on top of that? They believed I was frequenting my local bar too often and having one too many drinks. They pleaded with me that I follow their proposal. We argued further and eventually as a compromise, we agreed that we would take all of Chevron Netherlands oil & gas abandex but would still offer a notional $1 bid price. In my heart of hearts, I felt that a cash offer was needed to win but my management team, for which I had paid a respectable amount for their services, had convinced me otherwise. They were professionals I thought and they had my best interest at heart. The team printed out the documents for which I appended my signature and re-submitted.”
The same strategy his team rejected was the same strategy Petrogas of Oman the winner used.
Paddy said “Richard Kent sent me an email; Chevron Netherlands had been sold to Petrogas of Oman. The last bidder, the mystery company I couldn’t find. I’d later come to find out that USD 50 million plus an absorption of all the abandex was the winning formula for the bid – the same formula that I had proposed to my management team but they had pushed back on. This was a painful lesson to always trust my instincts, no matter the circumstance”
This is a big lesson to entrepreneurs that despite being ambitious, there should be a clear instincts to follow, people to tell even the fact he did not tell his father or any of his family friends that can help contributed to the failire and pride has no place in business of course, pride goes before destruction.
I believe Paddy has learnt his lessons and hopefully he try again later in the future.