Billionaire Femi Otedola has acquired 5.5 percent shares at Transcorp Plc, making him the second largest shareholder of the company.
Sources confirmed on Wednesday that the transaction was facilitated by an agreement between an entity owned by Otedola and Asset Management Corporation of Nigeria (AMCON).
AMCON spokesman Jude Nwauzor could not be reached for comments.
Otedola, who is also the chairman of Geregu Power, now owns about 2.245 billion shares representing 5.52 percent of the company.
Before yesterday, UBA Chairman and Nigerian billionaire, Tony Elumelu, was the majority shareholder of Transnational Corporation of Nigeria Plc (Transcorp), a publicly traded diversified conglomerate.
But that is now history, as Femi Otedola has taken over the company from Tony through an overnight coup that happened yesterday at the floors of the Nigerian stock exchange.
What did he do to achieve this?
It was simple: through his investment company, Femi bought shares worth 3.1 billion naira of Transcorp Nigeria at the Nigerian exchange.
Transcorp Nigeria’s shares at the Nigerian stock exchange are free floating shares, which is why it was easy for Femi to buy over the majority stake of Transcorp without recourse to boardroom politics.
The company also has about 39.65 billion out of its 40.65 billion outstanding shares on a free float.
No other shareholder held above 5% according to records.
First bank of Nigeria is another company that has free floating shares and that was why it was easy for Femi to take over the bank.
What free floating shares does is that any investor with huge wallet can buy over the company without going through the board room to take over the company.
The strategic investment vested in Femi Otedola, 5.52 percent stake in Transcorp.
With this latest purchase, Otedola has emerged as the largest shareholder in Transcorp, surpassing UBA Nominees (Tony Elumelu), which owns a 5 percent stake in the conglomerate.
This move positions Otedola to spearhead the conglomerate’s growth and create value for shareholders, who have seen a substantial decline in their investments over the past decade.
Transcorp Nigeria owns the Five star Transcorp Hotels in Abuja and Lagos.
They also owned Transcorp power plant in Afam and then an oil block OML in Rivers state.
With this overnight move by Femi Otedola, it is expected that the current management of Transcorp, led by Owen Omogiafo, who is loyal to Tony Elumelu, will resign any moment from now and then have their replacement, handpicked by Femi Otedola, who is the new majority owner of the conglomerate, take over the day to day running of the business.
The only reason this will not happen is if Tony and Femi arrive at a compromise to keep the current management.
As the chairman of Geregu Power, one of Africa’s fastest-growing power-generating companies, Otedola has demonstrated his ability to create value and drive growth. In 2021, Otedola became the largest shareholder in Nigeria’s oldest bank, First Bank of Nigeria Holdings Limited (FBNH), and his influence has significantly impacted the financial service group’s performance.
Since he became the largest shareholder in the Nigerian lender, its earnings have been on the rise, with FBNH’s profit increasing by nearly 100 percent in 2021. In the first nine months of 2022, the lender’s profit increased by 123 percent, from N40.9 billion ($93.4 million) to N91.29 billion ($208.8 million), thanks to its well-diversified loan portfolio.
Now, with his sights set on Transcorp, Otedola is poised to deploy the same growth strategies that have propelled Geregu Power to success. As the seventh most valuable company on the Nigerian Exchange, Geregu Power is currently worth over $1.7 billion, thanks to a 223 percent increase in its stock price since its debut on October 5, 2022.