Efforts by billionaire businessman, Femi Otedola to increase his stake in bluechip companies heightened last week with his claimed acquisition of 5.52 per cent in Transnational Corporation Plc, culminating in N 2.245 billion shares in the company, in a deal 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 and gas sectors.

The Decision of AMCON to offload shares may not be unconnected to the appreciation in the value of stock due. Highly capitalised stocks have witnessed massive appreciation in the past few years.

Market capitalisatìon of the NGX has increased by N13 trillion or 43 per cent in five years, from N16.15 trillion in 2018 to N28.25 trillion in 2023.

Although the company had denied any notification of possible acquisition of shares by Otedola, the strategic investment triggered an unprecedented rise in the value of Transcorp.

At the close of trading 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 per cent appreciation in one week with its capitalisation hitting N68.7 billion.

Shareholders and market operators who spoke, to The Guardian on the development described the transaction as strategic, noting that Otedola is a seasoned businessman, who had been able to create value through similar acquisitions in the past.

Vice President of Highcap Securities, David Adonri, said Otedola is taking a strategic position 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 holding and also enable him partake in the wealth, which Transcorp power company is creating.

Adonri said Transcorp is getting stronger fundamentally with a clear signal of a brighter future. He pointed out that the moving of power to the concurrent list is a game changer for the firm.

“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 AMCON may have begun to offload some of the shares it acquired from the non-performing assets of banks and other companies.

According to him, the assets which AMCON acquired by way of buying non-performing loans are being sold out, allowing Otedola to make the latest acquisition.

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 purchased some years ago.

“The shares to AMCON 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 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, also said that AMCON has shares of companies that used their assets as collaterals for loans during the banking consolidation.

“AMCON acquired those shares through debtors 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 had not yet received formal notification of any relevant interest in its shares, Transcorp welcomes any new shareholder.

“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 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.

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 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.

Otedola had taken an advantage of the leadership crisis in the bank to raise his stake and emerge 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 Transcorp, holds 273.1 million shares directly in the company, 274 million through his Heirs Holdings Limited and 294 million shares 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 at December 2022.

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