Transcorp confirms Otedola’s N5bn share acquisition

Transnational Corporation (Transcorp) Plc, has confirmed that Femi Otedola acquired a majority stake in the diversified investment company.

Transcorp made the revelation in a corporate document filed with the Nigerian Exchange Limited (NGX) on Thursday, 20 April, 2023.

Transcorp said Otedola, who is also the majority investor in Geregu Power, acquired 2.24 billion shares, which gives him a 5.52 per cent stake in Transcorp

The worth of the 2.24 billion shares was estimated at N5 billion when the shares are pegged to the company’s equity price of N2.23 kobo per share recorded on Wednesday, April 19..

With the acquisition, Otedola holds more shares than Tony Elumelu, the current chairman of Transcorp Plc, whose stake in the company is 2.06 per cent.

As of 31 December 2022, Elumelu held 273,104,041 direct shares in Transcorp. The billionaire businessman also held 293,983,193 indirect shares through HH Capital Limited and 273,545,722 indirect shares through Heirs Holdings Limited.

In the statement announcing Otedola’s share ownership in Transcorp, the company said: “As noted in our previous communication, the Company welcomes this expression of confidence in its leadership and management as we continue our unwavering commitment to superior stakeholders’ returns, anchored in our ideology of Africapitalism.

“Rest assured of our commitment to 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 for all.”

Transcorp had earlier said that no investor had informed the company that he or she bought its shares (in the huge volume) after reports circulated last week that Otedola was mopping Transcorp’s shares in the Nigerian stock exchange.

It however said, “Whilst the Company has not yet received formal notification of any relevant interest in its shares, Transcorp, Nigeria’s largest listed conglomerate, known for its broad and diversified shareholder base, welcomes every new shareholder acquiring shares in the Company.”

Industry experts who spoke to THEWILL expressed divergent views on the matter.

A Stockbroker and Head of Securities Trading at Planet Capital, Dr. Paul Uzum, said the development should be taken with some “caution”. He said Elumelu is a majority stakeholder in Transcorp after the ‘bloc’ of retail investors. He is a core investor whose rights exist in powers that could alter the investment platform of the company in a particular way.

“There is a lot about the equities market; it is deep and complex. Those who put their huge money in that place are not just ordinary people. Investments could be more than we see. I do not mean the market operates in a suspicious way. What I mean is that it is deep and complex.”

The National Coordinator of Independent Shareholders Association of Nigeria, Prince Dr Anthony O Omojola, said it is a welcome development and that Otedola’s decision to share in the risk of running the conglomerate shows he is a serious investor.

Omojola pointed out that the Asset Management Corporation of Nigeria (AMCON) has a huge stake in Transcorp, but admitted that he was not sure if what Otedola bought were all or part of the shares held by AMCON. He suggested that the government should hold some stake in Transcorp for strong corporate governance.

On the implications of Otedola’s “incursion” into Transcorp, Doyen of the Stockbrokers, Mr Sam Ndata, said it signals the emergence of a key investor whose stake in the company will offer him the opportunity to boost the corporate governance as key decisions are made in particular ways.