Why Otedola acquired 2.6bn shares in Transcorp

  Nigerian business mogul and billionaire, Femi Otedola, has continued to strengthen his stake in Transnational Corporation plc, Transcorp, one of Nigeria’s leading conglomerates with investments in the Hospitality, Power, and Oil & Gas sectors. Within two weeks, Otedola has spent over N6billion to acquire 2.6bn shares, representing 6.3% of the total shares of the […]

 

Nigerian business mogul and billionaire, Femi Otedola, has continued to strengthen his stake in Transnational Corporation plc, Transcorp, one of Nigeria’s leading conglomerates with investments in the Hospitality, Power, and Oil & Gas sectors.

Within two weeks, Otedola has spent over N6billion to acquire 2.6bn shares, representing 6.3% of the total shares of the company, which is currently being controlled by another billionaire, Tony Elumelu, who multiple sources confirmed would be one of the key players in the administration of Asiwaju Bola Tinubu.

The billionaire investor and chairman of Geregu Power Plant, who industry stakeholders have described as the Warren Buffett of the Nigerian Exchange Group, NGX, Daily Trust, gathered is making the new investment to strengthen his hold of the power sector.

Daily Trust had reported that Otedola acquired 2.245bn (5.52%) shares of transcorp between April 11 and 12 in a transaction, consummated between an entity he owned and the Asset Management Corporation of Nigeria, AMCON.

Transcorp confirmed the transaction, last week, in its filing on the NGX in compliance with Chapter 17, Rule 17.13 of the NGX Issuers Rules.

While commending Otedola for his expression of confidence in its leadership and management, the company in the filing signed by Acting Company Secretary, Funmi Olofintuyi, said as of April 19, the billionaire has 2,245,639,251 shares.

However, Daily Trust gathered that Otedola acquired additional shares before the holidays to take his stakes higher.

Stanbic IBTC Stockbrokers Limited and Apt Securities and Funds Limited midwifed the purchase of 228.4m and 105.5 million shares respectively.

The Managing Director of APT Securities and Funds Ltd, Mallam Garba Kurfi, said the largest single shareholder of Nigeria’s oldest financial institution, First Bank of Nigeria Plc (FBN Holdings) is a deliberate investor who puts his money where he has an interest.

“He is Warren Buffett of NGX.  He always sees beyond ordinary investors and because of that he always changes the game. He did it in FBNH which double its market capitalisation, same apply to Geregu Power and now to Transcorp

“Most of our Investors are small Investors or out of fear they fail to make a difference which he (Otedola) is bold enough to do. He is the only single investor who invests billions in a company he believes in. He is also ready to take his capital appreciation where it is worth taking,” he said.

The MD of ARM Securities Limited, Mr Rotimi Olubi, said the investment is a wise choice as Transcorp is one of the most profitable conglomerates in Nigeria with multiple sources of income and growth.

He noted Otedola is strengthening his stake in the power sector, which is expected to get more attention from the administration of Tinubu.

Daily Trust learned that Elumelu, who chairs Transcorp, 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.

According to reports, while about 1,695 investors own about 89% of the company’s shares, only UBA Nominees own about 9.25% of the company as of December 2022. No other shareholder holds above 5%, it was gathered.

The company also has about 39.65 billion out of its 40.65 billion outstanding shares on a free float.