How Otedola emerged FBN Holdings biggest shareholder with 7.57% stake

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Femi Otedola, Nigeria’s one-time third richest man, has upped his stake in FBN Holdings to 7.57 per cent, following a recent acquisition of an additional 2.5 per cent holding in the group, PREMIUM TIMES exclusively gathered.

Shares in FBN Holdings gained 2.59 per cent in Lagos on Friday following the news.

The magnate, whose interests span power generation, oil and gas, real estate and now banking, notified the group managing director of FBN Holdings of his shareholding status in a letter dated Thursday December 9, seen by PREMIUM TIMES.

Now totalling 2.717 billion units, Mr Otedola holds 210 million directly, 1.989 billion through Calvados Global Services Limited, 170 million through Primrose Global Concept, 175 million through Shetland Global, 120 million through Wells Properties and 53 million through Impetus Synergy.

“I have recently acquired additional shares in FBN Holdings Plc (the Company) which has brought my total stake to 7.57 per cent of the issued shares capital of the Company,” Mr Otedola said in the letter.

“Section 120 of the Companies and Allied Matters Act requires that I give notice in writing o the Company stating amongst other things, the particulars of the shares held by me or my nominees by virtue of which I am a substantial shareholder.”

The billionaire mogul has been in contention with Tunde-Hassan Odukale, the chair of Nigeria’s oldest lender FirstBank of Nigeria Limited (a subsidiary of FBN Holdings) for weeks on end over who owns the most shares in the group.

Tunde Hassan-Odukale, chairman FirstBankTunde Hassan-Odukale, chairman FirstBank

Otedola’s smart rise to the top spot of FBN Holdings’ ownership

The news of Mr Otedola’s (until then a rank outsider among the principal owners of the bank) gradual and surreptitious accumulation of the lender’s shares broke into the open towards the last week of October in a rude awakening to the investing community.

At that time, he had been purchasing shares in portions then summing up to 1.819 billion, using an indirect holding vehicle named Calvados Global Services Limited.

The deftly orchestrated acquisition was conducted on the secondary market and did not draw the attention of the media and the investment community because it was done in bits until the accumulated shares hit the 5 per cent threshold, at which point he officially informed the NGX authority as regulation demands.

That an external force could cause a big disruption in the top ownership of a corporation as large as FBN Holdings by suddenly becoming the biggest shareholder is a puzzle for the public and an occurrence that has irked other major shareholders.

Never has the chairman of Geregu Power Plc and previously that of the defunct Forte Oil (now Ardova) been known to be among the top shareholders of FBN Holdings until the recent development.


If it were a company that had bought out a majority stake in FBN Holdings in the same fashion Mr Otedola went about his acquisitions, the transaction could have been dubbed a hostile takeover by top shareholders.

Not until the news of Mr Otedola’s open declaration came to the fore did it begin to emerge that Mr Hassan-Odukale and related parties now own “5.36 per cent” stake, part of that figure from previously undeclared shares.

Mr Hassan-Odukale’s claim to 1.05 per cent holding belonging to Leadway Pensure PFA (a company majority-owned by the Hassan-Odukale’s family) as part of the 5.36 per cent has been disputed by authorities like the Nigerian Exchange and National Pension Commission, considering that such an investment, funded from a pool of employees’ pension contribution, cannot be said to belong to a single individual.

“The two largest shareholders are fighting for supremacy. But what we will see is there will be different alignments in terms of faction,” a source with market knowledge told PREMIUM TIMES on condition of anonymity.

TEXEM

“There will be a lot of internal politics in terms of appointing someone as the chairman because we already have a chairman which is the guy that has 5.35 per cent, that’s the Leadway guy (Odukale). So he won’t want this guy (Otedola) to displace him.”

Before the upset happened, the scramble for the dominant shareholder title had polarised interests across divides on the group’s board, which a leadership upheaval in May brought to light.

The race by Mr Otedola to scale up his shareholding had pushed demand for FBN Holdings shares to a record level on the stock exchange, where the volume traded by the stock in the last ten trading days surged to 2.4 billion units, causing an astronomical rise of 65.3 per cent in the share price in the four weeks to October 27.

PREMIUM TIMES learnt Otedola also has an investment worth $30 million (N12.45 billion at Thursday’s official exchange rate) in a long-term debt security in First Bank.

Data on the daily transactions in FBN Holdings shares in the last 10 trading days show 1.444 billion units of the group’s shares were traded, making it the most active of the 156 stocks listed on the NGX.

Mr Otedola stated in his latest letter to FBN Holdings that he is in the process of getting approvals from regulators including the Securities and Exchange Commission and the Central Bank of Nigeria (CBN) and informing the Corporate Affairs Commission.

The manner of Mr Otedola’s latest share purchase followed the former pattern in that he acquired the bulk of the new shares using five different companies and buying only few directly in his own name apparently in order not to draw the attention of rivals.

That FBN Holdings, whose flagship subsidiary First Bank came close to bankruptcy in 2016 as its bad loan charges surged 90 per cent to N226 billion before the CBN came to its rescue, could beguile a deep-pocketed and astute investor like Mr Otedola into investing several billions of naira in it remains a mystery.

Yet, it could be that Mr Otedola is seeing in the lender what others cannot see.

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