Efforts by billionaire businessman, Femi Otedola to control assets of many blue chips heightened last week with claims of acquisition of a 5.52 per cent stake, culminating to N 2.245 billion shares in Transnational Corporation Plc in a deal consummated between an entity owned by Otedola and the Asset Management Corporation of Nigeria ( AMCON).
Transcorp is one of Nigeria’s leading conglomerates with investments in the hospitality, power, and oil & gas sectors
The decision of AMCON to offload shares may not be unconnected to the rebound recorded in the value of shares on the Nigerian Exchange Limited ( NGX) due to the number of highly capitalised companies listed on the bourse in the past five years.
Market capitalisatìon of the NGX has increased by N13 trillion or 43 per cent in five years, from N16,154 trillion in 2018 to N28,267 trillion in 2023.
Although the company had denied any notification of possible acquisition of shares by Otedola, but the strategic investment triggered an unprecedented rise in the shares of Transcorp Plc.
At the close of trading last week Friday, the stock price rose to N1.69 kobo, from N1.37 kobo at which it closed for trading on Friday, April 6, 2023, representing almost 35 percent increase in one week with an N68.7 billion market cap against N55.6 billion market capitalization recorded last week.
But shareholders and market operators described the transaction as strategic and by the law, noting that Otedola is a seasoned businessman that has been able to make other beneficial acquisitions in the past.
Vice President of Highcap Securities, David Adonri said
Otedola is taking strategic positions across the entire spectrum of the energy and power industries.
According to him, the business mogul is currently implementing a diversification strategy that will give him access to upstream petroleum holdings and also enable him to partake in the wealth that Transcorp electric power company is creating.
Furthermore, Adonri noted that Transcorp Plc is getting stronger fundamentally with a clear signal of a brighter future.
He pointed out that the amendment of the constitution moving electric power to the concurrent list is a game changer for the firm in the power industry.
“In addition to Otedola’s ownership of a petroleum marketing company (downstream) and an electric power generating company, he is also a shareholder in the new Dangote Refinery (midstream).
“For Transcorp, the stock is attractive now because its market value appears to be far below its long term intrinsic value,” he said.
President of NewDimension Shareholders Association, Patrick Ajudua said the AMCON may have begun to offload some of the shares it acquired from the non-performing loans of banks and other companies
According to him, the shares that AMCON acquired by way of buying non-performing loans are being sold out of which Otedola declared interest and acquires 5.52 per cent.
He said AMCON is currently holding shares in a lot of quoted companies, noting that those are the shares used as collateral for the non-performing loans that AMCON was mandated to purchase and resolve.
“The shares came to AMCON’s possession as a result of settlements /resolutions.Amcon would still offload all these shares if they want to finally exit and they have the right to sell their shares to anyone that declares interest to purchase.
“He has entered as the second largest individual aside the UBA nominees, it is a welcome development, that is the beauty of diversification, allowing people to come in and add value to the organisation.”
National Coordinator of Independent Shareholders Association, Moses Igbrude said AMCON is in possession of shares of companies that used their it as collateral to borrow from banks during the banking consolidation era.
“AMCON acquired those shares through debtor to banks. Those people who borrowed from the banks and could not pay have forfeited their shares which is what Amcon is currently offloading,” he said.
President, Group Chief Executive Officer, Transcorp Group, Dr. Owen Omogiafo in a statement noted that while the company has not yet received formal notification of any relevant interest in its shares, Transcorp welcomes every new shareholder acquiring shares in the company.
“We welcome this expression of confidence in the leadership and management of Transcorp, as we continue our unwavering commitment to superior stakeholders’ returns, anchored in our ideology of Africapitalism. “We remain resolute in executing our Group’s strategy of making strategic investments in key sectors within the Nigerian economy, our transformation agenda and our ability to contribute positively towards building prosperity,” she said.
Recall that Otedola had in October 2021 named a single majority shareholder of FBN Holdings Plc with the acquisition of N30 billion worth of the bank’s equities at the NGX.
Just like the unfolding events in his Transcorp deal, the management of FBN Holdings during the period confirmed that the business mogul and his nominee, Calvados Global Services Limi ted have acquired a total of 1,818,551,625 units of shares from the company’s issued share capital of 35,895,292,791 barely 24 hours after the bank denied any notification of possible acquisition of shares by Otedola.
In a statement, the bank affirmed: “We refer to our communication to the market dated October 22, 2021 on the above subject wherein we stated that we would inform the public of any substantial acquisition, upon receipt of notification from the shareholder.
“This morning, October 23, 2021, FBN Holdings Plc received a notification from APT Securities and Funds Limited, that their Client, Mr. Otedola Olufemi Peter and his nominee, Calvados Global Services Limited have acquired a total of 1,818,551,625 units of shares from the Company’s issued share capital of 35,895,292,791.
“Based on the foregoing, the equity stake of Mr. Otedola Olufemi Peter and his nominee in the Company is now 5.07per cent.”
With the development, Otedola has wasted no time in taking advantage of the leadership crisis that rocked the bank during the period to become the single largest shareholder of FBN Holding Plc.
Otedola’s stake in Transcorp positioned him as the second largest shareholder of the company. Transcorp is currently controlled by another billionaire, Tony Elumelu, who took over control of the company in 2012.
Elumelu, who chairs Transcorps, holds 273.1 million shares directly in the company, 274 million indirectly through Heirs Holdings Limited and 294 million shares indirectly through HH Capital Limited.
About 1,695 investors own about 89 per cent of the company’s shares, only UBA Nominees own about 9.25 per cent of the company as of December 2022.
