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Tag: Mergers

  • Tax implication of mergers and acquisitions

    Tax implication of mergers and acquisitions

    Simply put, a merger is a combination or integration of existing companies to form a single company while acquisition is known as take-over. It is the take-over of by one company of sufficient share in another company to give the acquiring company control over that other company.

     

    Statutory Requirement under Companies Income Tax Act (CITA)

    The CITA in Section 29(12) Cap (21, LFN, 2004) provides that ‘‘no merger, take-over, transfer or restructuring of the trade or business carried on by a company shall take place without having obtained the Service’s direction under sub-section 9 of this section and clearance with respect to any tax that may be due and payable under the Capital Gains Tax Act’’. The implication of this provision is that the approval of the Federal Inland Revenue Service is a necessary condition for the completion of the process in a merger or acquisition bid. Therefore, no merger or acquisition bids would be fully consummated without the companies involved having obtained consent from the FIRS.

     

    Procedure for Obtaining the Service’s Approval

    From the start, the merging companies are required to submit to the FIRS, copies of the scheme of merger and scheme of arrangement on the consolidation request for its study and proper evaluation in order to ensure that taxes which may result from the companies’ transactions are correctly assessed and collected. Herein lies the relevance of the Service’s powers under section 29(9) (i) to require either of the companies directly affected by any direction which is under the consideration of the Service to guarantee or give security to its satisfaction for payment in full of all tax due or to become due by the company which is selling or transferring such asset or business.

     

    Tax Issues in Mergers and Acquisitions

    A merger may result in any of the following situations:

    • Formation of a new company.

    • Continuation of the consolidated business by one of the merging parties, in its name or under a new name.

    • Cessation of business by the other merging parties.

    In acquisition, there is only an acquiring company (ies) and the company being acquired.

     

    Emergence of a New Company

    Rendition of Annual Returns

    Where a new company emerges from a merger process, then, the new company is expected to file its returns, in line with the provisions of Section 55(3)(b) of CITA. The section provides that “every new company shall file with the Service, its audited accounts and returns within eighteen (18) months from the date of its incorporation or not later than six (6) months after the end of its first accounting period as defined in section 29(3) of this Act, whichever is earlier’’.

    It should however be understood that a mere change of name does not make an existing business entity a new company. Such companies will continue to be treated as old businesses on an on-going concern basis.

     

    Basis of Assessment

    Commencement rule as provided under Section 29(3) will apply to the new company, except where any of the under-listed circumstances arise:

    (I) Where the merging parties are connected parties, the Service may direct that commencement rule be set aside, in which case, the new company will file its returns as an on-going concern and its assessment will be determined on preceding year basis.

    (II) Where the new business is a reconstituted company, taking over the trade or business formerly run by its foreign parent company.

    Claim of Allowances

    Companies Income Tax Act (CITA) did not categorically address the value at which assets may be transferred for the purpose of capital allowances claims. However, International Accounting Standard 22 prescribes that in merger accounting, the assets, liabilities and reserves must be recorded at their carrying balances, implying that merger process does not permit the recording of assets at their fair value in the event of consolidation. The new company will therefore not be entitled to any investment allowance claim or initial allowance on the transferred assets; it will only be entitled to claim annual allowance on the Tax Written Down Values (TWDV) of the transferred assets.

     

    Unabsorbed Losses and Un-Utilized Capital Allowances Brought Forward

    The new company may also not be permitted to inherit the unabsorbed losses and capital allowances of the absorbed companies, except under the following circumstance:

    (i) where a reconstituted company is carrying on the same business previously carried on by this company and it is proved that the losses have not been allowed against any assessable profits or income of that company for any such year; in that case the amount of unabsorbed losses shall be deemed to be a loss incurred by the re-constituted company in its trade or business during the year of assessment in which the business commenced.

     

    Taxes and Deductibility of Related Expenses

    (i) Stamp Duties

    Duty payment will arise on the share capital of the new company, subject to the provisions of Section 104 of the Stamp Duties Act, in relation to capital and duty relief.

    (ii) Consolidated Expenses

    Fees paid to statutory bodies such as SEC, NSE, CBN, Land Authorities etc, including professionals like accountants, stockbrokers, issuing houses, and solicitors are regarded as capital in nature and will therefore not be allowed as deductible expenses by virtue of Section 27(a) of CITA.

    (iii) Taxation of Consolidation Fees:

    Fees paid to professionals for services rendered in connection with consolidation will be subject to VAT and WHT at the rates of 5% and 10% respectively.

     

    4.3.1 Tax Indemnification

    Section 29(9)(i) of CITA provides that the Service may require the new company to guarantee or give security for payment in full, for any tax due or that may become due by any of the ceased companies.

     

    4.3.2 Approval for Pension Scheme

    The new company will need to obtain a Joint Tax Board (JTB) approval for its staff pension scheme.

     

    Status of a Surviving Company in Relation to Taxation

    It is a possibility that one of the merging companies survives and its old name or a new name to inherit the assets, liabilities, reserves and entire operations of the merging parties. Where this happens, the following points must be noted:

    (i) The surviving company must file its returns in line with the provisions of section 55(3)(a) of CITA.

    (ii) Commencement rules under section 29(3) of CITA will not apply to the surviving company, as it will be regarded as an existing company.

    (iii) The surviving company will not be allowed to claim investment allowance on the assets which were transferred to it and will also not claim initial allowance on such assets.

    (iv) The surviving company may however claim annual allowance only on the tax Written down Values (TWDV) of the assets transferred to it.

    (v) The surviving company may not inherit the unabsorbed losses and capital allowances of the merging companies, except it is proved that the new business is a reconstituted company.

    (vi) All fees payable on merger bids or consolidation will be liable to VAT and WHT just like it is applicable on the emergence of a new company. Stamp duties will be paid on the increase in share capital and the company will have to obtain its own staff pension scheme approval from the JTB.

     

    Ceased Businesses

    The merger or consolidation exercise may also result in cessation of business for any of the merging parties. In this case, cessation rule as applicable under section 29(4) of CITA will apply to any of the merging companies which have now ceased business permanently, except if any of the following circumstances occur:

     

    (i) Where the merging companies are connected. Here, the Service may direct, in line with its discretionary powers, under section 29(9) of CITA that the cessation rule may not apply.

    (ii) Where a reconstituted company is formed to take over the trade or business formerly run by its foreign parent company. (See Section 29(10) of CITA.

     

    Capital Gains Tax Shares or Cash Received

    Section 32A of Capital Gains Tax Act (CGTA) Cap 121LFN 2004 provides that a person shall not be chargeable to tax under the Act, in respect of any gains arising from the acquisition of the shares of a company, either merged with, or taken over or absorbed by another company, as a result of which the acquired company has lost its identity. However, where shareholders are either wholly or partly paid in cash for surrendering their shares in the ceased business, the gains arising from the cash payment will be subject to CGT.

     

    Effect of Taxations on Consolidation Acquiring/Acquired Companies

    The tax implications of consolidation on an acquiring company or acquired companies are similar to those of mergers. Acquisition expenses are non-deductible while fees paid to professional bodies are equally subject to WHT and VAT.

  • U.S. stocks fluctuate on mergers

    UNITED States stocks fluctuated, erasing an earlier loss, as merger activity offset concerns over crises abroad and weaker home-sales data before a Federal Reserve policy decision.

    Tesla Motors Inc. rose 2.3 percent on a report it reached an agreement on a battery plant.

    Trulia Inc. jumped 19 per cent as Zillow Inc. agreed to purchase the company for $3.5 billion.

    Family Dollar Stores Inc., a discount store chain, soared 24 percent after Dollar Tree Inc. agreed to buy it.

    The Standard & Poor’s 500 Index added 0.1 percent to 1,980.53 at 2:03 p.m. in New York, erasing an earlier drop of as much as 0.6 percent. The Dow Jones Industrial Average rose 30.37 points, or 0.2 percent, to 16,990.94. Trading in S&P 500 stocks was in line with the 30-day average during this time of day.

    “The market has been very benign,” Sam Wardwell, an investment strategist at Pioneer Investments in Boston, said in a phone interview. His firm manages about $250 billion.

    “Economic news has been just fine. Earnings have been fine. You got a little bit geopolitical fear out there. We’re still on track and as long as wars in the rest of the world don’t upset the upper card, the second half of this year continues to look like it’s going to be a gradually improving year.”

    Stocks slumped earlier in the day as fewer Americans than forecast signed contracts to buy previously owned homes in June, a sign residential real estate is struggling to strengthen.

    An S&P index of homebuilder shares dropped 1.6 percent to the lowest level since May.

    Outside the U.S., international pressure mounted on Israel to end its three-week offensive in  the Hamas-controlled Gaza Strip, with President Barack Obama and the United Nations Security Council demanding an immediate truce.

    In Europe, President Vladimir Putin faces intensifying U.S. and European sanctions aimed at forcing him to help end the separatist war in neighboring Ukraine. The Obama administration said it had satellite photos showing Russia firing across the border at Ukraine forces.

    The S&P 500 ended little changed last week as investors weighed corporate earnings. The gauge closed 0.5 per cent below its all-time high of 1,987.98 reached July 24. The index has rallied about seven per cent this year, as the economy shows signs of recovering from a 2.9 per cent drop in the first quarter amid renewed pledges from the Fed to continue stimulus.

  • Communication strategies in mergers and acquisitions

    Communication strategies in mergers and acquisitions

    The concept of mergers and acquisitions has long been considered one of the fastest routes to business growth. Yet, experience has shown that most mergers fail to achieve the expected synergy and are more often counterproductive at the end of the day. Post-merger integration challenges are many. Even though nobody expects structural changes occasioned by mergers to be so smooth, there are appropriate strategies that can be put in place to ensure that the integration process is carefully managed to limit disruptions and achieve synergy so as to exceed the expectations of all stakeholders. One of the strategies for achieving successful mergers or acquisitions is effective communication.

     

    Communication role

    Communication needs to begin during the preliminary stage of the merger or acquisition to set the tone for success. Too often, communication does not start until it is too late. Research shows that mergers and acquisitions go through three broad phases. As part of an AT Kearney global survey conducted in 1998 to 1999, the question, “Which phase bears the greatest risk of failure?”, brought the following response: Strategy development, target shortlisting, due diligence – 30%; Negotiation and closing the deal – 17% and Post-merger integration – 53%.

     

    People issues and most prominent time

    This response shows that the most important time for a merger or take-over is when the deal has been formalised and the more difficult stage of “bedding down” the process has started, thus requiring intensive communication. However, there is a case that communication should start early to pave the way for internal acceptance and post-merger integration. Overwhelming experience indicates directly or indirectly that people issues are the main reason for take-over failures. And communication is still central to the people issues. According to McKinsey’s studies, “Management of the human side of the merger is the real key to maximising the value of the deal.” Watson Wyatt Worldwide says cultural incompatibility is consistently the biggest barrier to integration. But Mercer Human Resource Consultants’ discovery is that out of three key merger factors – people, processes and systems – only people issues made a difference to the success of mergers in the decade to 2001.

     

    Employee communication

    Effective employee or internal communication is the first or second most important issue emerging in all studies of mergers. Internal communication and culture changes are identified as the hardest to achieve, but the most important in merger success. Tragically, they are generally under-resourced in post-merger integration, and are often absent before the deal and the due diligence phases. Interestingly, customer issues are also extremely poorly resourced.

    At this analytical juncture, the questions to ask are, “How could management handle the situation?” and “How could highly-paid management consultants let this happen?” The two most important constituencies to look after – customers and employees – have largely been ignored. And the reason for this defies logic. Most of the merger communication budgets around the world have been spent on external communication rather than employee or internal communication.

    Regardless of the brilliance of the vision and the fit in a merger, the subsequent success of the deal depends mostly on the employees. They are the ones whose day-to-day actions can make a merger work or collapse after the deal has been sealed. Sufficient investment in internal communication is the link in keeping the employee attitudes positive towards the changes brought about by the merger.

     

    Early communication

    Even before a formal merger or acquisition is underway, employees often become aware from indirect information or by chance that something is underway. It is human nature to be inquisitive. If they feel management is keeping information from them, quite understandably they start to feel anxious.

    When people are uncertain, they start speculating about the clues in front of them. Invariably this interpretation of clues becomes paranoia as they chat with colleagues and quickly have the impression that the management is conspiring to catch them unawares. The grapevine goes overtime with rumours. Productivity will begin to drop as staff waste time in discussing rumours and losing the steam of their motivation. With well-developed rumours, some staff will actually start leaving the company before the “bad news” is broken to them.

     

    Initial indifference

    Research shows that when a merger is announced, the staff in the acquiring company may not feel concerned initially. They belong to the new parent and do not anticipate much change. This sense of security is not always justified because the process of establishing the new joint organisation can reveal areas of the acquiring company that could be improved upon.  However, if two roughly-equal parties merge, change will hit both sides. Employees will become anxious about their jobs. They will suddenly have to confront loss of status and influence; uncertainty about the employers’ plans; a fight for individual survival as fear of job cuts catches them; increased workloads because some people leave voluntarily or involuntarily; a  spillover effect into individuals’ lives.

     

    Fact

    It is a truism that effective or strategic communication plays a key role in addressing these issues, but it is difficult and complex. This is because communication demands intensive time from senior management at a time when they may be totally devoted to the technical and financial aspects of the deal, and may not have sufficiently considered the impact on others. Often the skill of effective communication requires training because many managers have never received guidance on good interpersonal communication practices.

    • To be continued

  • Mergers, battlegrounds and the 2015 poll

    Mergers, battlegrounds and the 2015 poll

    Last Tuesday’s declaration of five PDP governors for APC has created new battle grounds ahead 2015, reports Assistant Editor, Dare Odufowokan

    The raging crises within the ruling Peoples Democratic Party (PDP) reached the climax last Tuesday when five, out of the seven aggrieved governors and some of their followers finally dumped the troubled party and pitched their tent with the opposition All Progressives Congress (APC).

    Their movement into the APC continued a string of mergers and alliances that has so strengthened the opposition party in recent times that analysts are saying that by the time the dust raised by the governors’ defection settles, the PDP would have lost its majority in one, if not both the two chambers of the National Assembly.

    Such analyses are based on the permutation that should federal lawmakers follow their governors’ choice of party affiliations, the APC would have automatically taken over as the majority party in the House of Representatives while the senate appears dicey.

    The five aggrieved governors who have defected are: Aliyu Wamakko (Sokoto); Rabiu Kwankwaso (Kano); Rotimi Amaechi (Rivers); Abdulfatah Ahmed (Kwara); and Murtala Nyako (Adamawa).

    Governors Sule Lamido (Jigawa) and Babangida Aliyu (Niger) chose to stay back under the embattled umbrella of the PDP.

    The governors’move has thrown up a new political equation where the APC now has 16 governors in its fold, the same number as the one the PDP can conveniently boast of. The nPDP is left with two while the All Progressive Grand Alliance (APGA) and the Labour Party (LP) have one each.

    Following the confirmation of a merger at the special conventions of the then three co-operating political parties, namely the Action Congress of Nigeria (AC N), the Congress for Progressive Change (CPC) and the All Nigerian Peoples Party (ANPP), earlier in the year, the APC inched its way closer to being an equal rival to the PDP when it raked eleven governors into its fold.

    Back then, the ruling party had its members as governors in 23 states, accounting for nearly two-third of the 36 states of the federation. But with indications daily emerging that some of the PDP governors may dump the party in search of other political platforms ahead of the 2015 general elections, pundits predicted President Goodluck Jonathan’s party can only beat its chest assuredly in just about 12 of the said states.

    This uncertainty had thrown up about 11 PDP controlled states as battleground ahead of the 2015 general election, with both the ruling party and the emerging APC looking good to win the battle for the political souls of those states.

    But with five of those states now in the kitty of the APC as predicted, the PDP, according to analysts, will still have to return to the drawing board if it intends to keep the opposition off some of the states remaining in its pouch as well as the four unaligned states of Jigawa, Niger, Ondo and Anambra, as the date for the 2015 election draws closer.

    Niger State

    There are indications that come 2015, the PDP is most likely to suffer defeat in Niger State. The governor of the state was the leader of the seven aggrieved governors who formed the new PDP faction of the ruling party.

    Although he has chosen to remain in the PDP, analysts say his decision to remain in the PDP ‘for now’ is clearly not on a final note as he still has one axe or the other to grind with either the PDP leadership or the presidency.

    Governor Babangida Aliyu of Niger State’s reported interest in the presidency come 2015 has pitched him against the PDP establishment. Recently, he accused the presidency of bribing some northern leaders because of the 2015 presidential election.

    But that is not to say with Aliyu’s disenchantment with the ruling party, the PDP is finished in the state. Rather it will be more apt to declare Niger State a political battleground as both the APC and the PDP will seek to lay claims to the political soul of the state, irrespective of the governor’s final decision on whether to dump PDP or remain within.

    The current move by the Presidency to make former governor of the state, Abdulkadir Kure, a minister will position him as a new rallying point for the PDP in the state should Governor Aliyu dump the party.

    Already, Kure has been in the forefront of efforts to counter moves by the governor’s new PDP faction to corner the party’s structure as the crises within the party deepens.

    Aside Kure, the likes of the deputy governor, Musa Ibeto, Senator Zainab Kure, Colonel Isa Kotangora, Dr. Abdulrahaman Enagi, Ambassador Zubairu Dada and former deputy governor, Dr. Shem Zagbayi Nuhu, amongst others, are still very much around in the PDP.

    But should Governor Aliyu move to the APC with his current structure as well as majority of the current political office holders in the state, it would be left to be seen if the remnant of the PDP in the state will be able to curtail what many observers called the imminent takeover of the state by the opposition.

    Jigawa

    It is a similar fate to Aliyu’s that has befallen Governor Sule Lamido of Jigawa State. He is also a part of the seven aggrieved governors who formed the new PDP after months of public disapproval of the state of affairs in the ruling party.

    With posters proclaiming his desire to gun for the presidency all over the place, he appears to have drawn the ire of the presidency. It is also very obvious that he is still uncomfortable with his membership of the party and may move elsewhere soon. This is because he still makes very uncomplimentary remarks about the PDP and its leadership.

    It was also learnt that the opposition, especially the APC, is still bent on convincing Lamido and Aliyu to move into its camp. Until the two aggrieved PDP governors announce their final take on the ongoing re-alignment of political forces, their various states remain battleground states where any of the contending parties can claim vital victories.

    The contest in Jigawa should Lamido join APC will not be one sided. Though the governor is sure of moving into his new party with nearly the entire PDP structure in the state, the opposition would still have a number of prominent politicians left in the party to contend with in 2015.

    The opposition to Lamido would most likely be led by his predecessor, former Governor Saminu Turaki, who is also reportedly being repackaged by the PDP leadership and the presidency to give the governor a good political fight during the 2015 general election.

    Rivers

    In spite of the defection of Governor Rotimi Amaechi into the APC, Rivers State remains one place where the 2015 political contest will be at its fiercest. This is because of the unending supremacy war between the governor and his erstwhile ally and Chief of Staff, Education Minister, Nyesom Wike.

    With the governor’s defection, it appears the entire PDP in the state have moved to the APC but that is without Wike’s fast growing political group, the Grassroots Development Initiative (GDI).

    The presence of political heavyweights like former governor, Peter Odili, Senator George Sekibo, Felix Obuah and others in PDP is also a pointer to the fact that the battle for Rivers State in 2015 will be keenly fought.

    While pundits are predicting that the APC will win the support of the electorates in the state on the strength of the popularity and performance of Amaechi, it is also being considered that the PDP will not be a pushover in the race on the strength of Wike’s political sagacity and the much touted support of certain forces in Abuja.

    However, the no love lost situation among the leaders of the PDP in the state, pundits say, will be an added advantage to Amaechi and his new party. Currently, Peter Odili is not known to relate well with the leadership of the party in the state.

    Also, there is an age-long political rivalry between Wike and Senator Sekibo who is nursing a gubernatorial ambition for 2015. Wike too is said to be interested in being voted in as the next governor of the state.

    Gombe

    In Gombe, leaders of the APC in the state said they are ready to dislodge the ruling party in 2015 as PDP will meet a stiff resistance in 2015 if its plan is to rig itself back into office.

    National Organising Secretary of the defunct Action Congress of Nigeria (ACN), Abubakar Inua Kari, who is from the state, assures the people of Gombe of the readiness of the APC to defeat the ruling party in 2015. The APC leader said Governor Ibrahim Dankwanbo and his people should start preparing to leave the government house.

    The merger of three leading opposition parties in the state, namely CPC, AC N and ANPP, according to some observers of the politics of the state, is likely to alter political calculations ahead of the 2015 general elections.

    The presence of Senator Danjuma Goje, immediate past governor of the state in the APC is also strengthening the position of Gombe State as a state where the unexpected can still happen in 2015.

    But observers say if the PDP in the state continues to enjoy its current string of reconciliations and realignments, it will go into the 2015 election with an advantage politically.

    Although it is yet to officially announce the governor as its candidate for the 2015 governorship contest, the body language of the leadership of the PDP in the state indicates that it will surrender its ticket to Dankwambo without hassles to seek another term in office.

    Recently, the Minister of Transport, Sen. Idris Umar, expressed support for the re-election of Dankwambo in 2015. This endorsement comes across as a big one for the governor as the minister has earlier been rumoured to be eying the governor’s job.

    Katsina

    Katsina State is one of the states where states where the defucnt ACN, CPC and the ANPP had impressive showings in the last election. With the three parties collapsing into the APC, the PDP will definitely be given a run for its money in these states come 2015.

    Checks by The Nation revealed that leaders of the ruling party in the Katsina state are already worried that the party’s candidate in the forthcoming election may suffer defeat in the hands of the emerging All Progressive Congress (APC).

    A source, who pleaded anonymity, said, “This is not an easy one for us in Katsina. The merger of Buhari’s CPC and the ANPP is a serious threat to the PDP in the state.

    On their own, the two parties have followership in Katsina. General Buhari and Aminu Bello Masari are respected sons of the state. When such parties now go into a merger, it is certain to bring headache to the ruling party and we are really worried by the development.

    Moves by the political camp of the late President Umar Musa Yar’Adua to join the APC is also creating ripples in the political landscape of the northwestern state. Should that happen, the state will further become open to any of the contending political forces.

    Benue

    In Benue, the APC, which is a coalition of some opposition political parties in the state, is anchored on the Action Congress of Nigeria (ACN). Though the ACN lost the 2011 governorship elections in Benue State, it made a lot of waves during the elections, which left an indelible mark on the political landscape of the state.

    Given the political heavy weights that abound in the APC in the state today, pundits are of the opinion that the party is in a position to challenge the ruling PDP seriously in 2015.

    With the likes of the immediate past governor of the state, Senator George Akume; Senator Daniel Saror, Gen. Indyar Garba, Oker Jev, Buruku Federal Constituency; John Idyeh, Gboko/Tarka and Benjamin Aboho, Kwande/Ushongo and Usman Abubakar, aka Young Alhaji, all working together to oust the PDP in Benue State, the state is definitely a potential battleground.

    But for a party that boast of the incumbent governor, the current Senate President, a former national chairman of the PDP amongst other notable chieftains, the PDP in Benue State will also go into the next general election prepared for a fight to finish.

    However, observers say internal wrangling like the one between Governor Gabriel Suswam and Senator Barnabas Gemade, may turn out to be the grace required by the APC to do the ruling party in come 2015.

    Adamawa

    In spite of last Tuesday’s defection of Governor Murtala Nyako of Adamawa State to the APC, the political road to the Dougeri Government House, Yola, remains as unpredictable as it has been for months now.

    Particularly for the Peoples Democratic Party (PDP) which now wants to return as the ruling party in 2015, its unending internal wrangling has thrown the contest wide open. Nyako’s decision to join the APC merely confirmed the next election as a political decider of some sort in the political sphere of the state.

    Nineteen out of the 25 members of the Adamawa State House of Assembly and other government functionaries had few weeks earlier, decamped to the APC at a meeting that was attended by the leader of the APC in the state, Alhaji Abdulrahaman Adamu, a one-time Minister of State for Defence and former All Nigeria Peoples Party (ANPP) vice chairman in the North East geopolitical zone.

    Others at the meeting, were the factional chairman of the Nyako-backed PDP in the state, Alhaji Umaru Mijjinyawa Kugama; Mr. P. P. Elisha, the factional secretary of the party; Interim National Vice Chairman of the APC in the North East, Alhaji Umaru Duhu; 19 members of the Adamawa State House of Assembly, national treasurer of the APC, the first son of Governor Nyako, Commander Abdul’Aziz (rtd) and a host of other dignitaries from the APC and the Nyako camp.

    Being an indigene of the state, the national chairman of the party, Alhaji Bamanga Tukur, would be aiming to win “at home”. How he intends to do that without Nyako and other prominent chieftains who followed the governor into the APC is left to be seen.

    Before now, the state chapter of the PDP has been polarised, culminating in the formation of three groups among which loyalty is shared by former Vice President Abubakar Atiku, Nyako and Tukur.

    The situation in Adamawa now is such that while Nyako and his men now in the APC will be fighting Tukur from outside, Atiku and other equally aggrieved chieftains will be tormenting the PDP boss politically from within.

    But the PDP can still boast of having some heavyweights in its kitty with which it can confront the rampaging APC during the next general election. People like former Deputy Senate leader, Senator Silas Zwingina, Senator Halilu Girei and former Governor Boni Haruna are still members of the PDP.

    Anambra and Ondo

    There are also the two “undecided” states of Anambra and Ondo. The two are currently standing independent of the two leading gladiators. While Governor Peter Obi of Anambra is holding firmly to the remnant of a faction of the troubled All Prgoressive Grand Alliance (APGA), Governor Olusegun Mimiko of Ondo State is of the Labour Party (LP).

    But analysts say the two will not remain aloof for long. With the predictions that they will soon pitch their tents with either of the PDP or APC, these two states remain swing states where anything can happen in 2015 depending on where their governors decide to pitch their tents.

    In addition, President Jonathan’s dwindling popularity in the northern part of the country and allegations that his administration did very little to better the infrastructural states of the eastern and western geo-political zones of the country combine to make Anambra and Ondo more interesting than usual.