Otedola

BY EMEKA EJERE

The board of FBN Holdings Plc (FBNH) may soon witness an adjustment to reflect a major change in the ownership structure of the holding company for First Bank of Nigeria Limited (FBN).

The Group (FBNH) in a statement issued on the Nigerian Exchange Limited’s portal on Saturday put an end to a raging controversy when it announced that the Chairman of Calvados Global Services Limited, Mr Femi Otedola, had acquired substantial shareholding in the company.

The statement, signed by the company secretary, Mr Seyi Kosoko said, “We refer to our communication to the market dated, October 22, 2021 on the above subject wherein we stated that we would inform the public of any substantial acquisition, upon receipt of notification from the shareholder.

“This morning, October 23, 2021, FBN Holdings Plc received a notification from APT Securities and Funds Limited, that their client, Mr Otedola Olufemi Peter, 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.

“Based on the foregoing, the equity stake of Mr Otedola Olufemi Peter and his nominee in the company is now 5.07 per cent.”

On Friday, FBNH had denied media reports that Otedola had acquired a significant shareholding in the company. The Group in a statement signed by Kosoko, and filed with the Nigerian Exchange Limited on Friday, said it had not received any notification of such acquisitions.

It had said, “The attention of FBN Holdings Plc has been drawn to media reports today (Friday) that a certain individual has acquired significant shareholding interest in FBN Holdings Plc.

“As a listed company, the shares of FBN Holdings are publicly traded, and sale and acquisition of shares is expected in the normal course of business. We operate in a regulated environment, which requires notification of significant shareholding by shareholders to the company, where shares are held in different vehicles, further to which the company will notify the regulators and the public as appropriate.

“The company is yet to receive any notification from the individual mentioned in the media report, of such acquisitions.”

The acquisition of a significant shareholding in the FBN Holdings (FBNH) Plc, by Otedola had sparked controversy among stakeholders, with FBNH denying official knowledge of the transaction.

It was even more so with the Nigerian Exchange Limited (NGX) describing the development as a speculation since, according to it, neither the bank nor the NGX Reguation has notified the Exchange of such deal.

Aggressive mop-up

Otedola in a series of secondary market transactions and negotiated deals was confirmed to have acquired more than five per cent equity stake in FBNH. Nigerian capital market rules set a threshold of five per cent for “material” or significant shareholding, which must be disclosed to the regulatory authorities and the board of the affected company.

FBNH currently has a total outstanding shareholding of 39.5 billion units and a market capitalization of N423.5 billion (over a billion dollars assuming official exchange rate). According to the 2020 FY report of the bank, 40 shareholders owned 31.03% of the bank while no individual shareholder held more than 5% of the bank.

It is believed that Otedola now owns over 5% of the bank through his proxies and investing vehicles,, thereby setting himself up to be the single largest shareholder of the bank.

Sources conversant with happenings and dealers at the stock market confirmed that business mogul might have acquired more than two billion ordinary shares of 50 kobo each in FBNH in a series of secondary transactions that heightened with a major cross deal two weeks ago.

For instance, Otedola was believed to be the proxy buyer in a N7.57 billion cross deal at the NGX on October 07, 2021. A total of 473 million shares of FBNH were crossed at N16 per share, significantly above the market price.

The transaction was registered as a “negotiated cross deal” by FBNQuest Securities Limited, implying that the deal was already concluded between the parties and was merely taken to the market to formalise the transaction.

Alao, a Marina, Lagos-based stockbroking firm confirmed to a major daily that it sold several millions of shares to Otedola in multiple secondary market transactions, deals that popped up the firm and FBN Holdings as largest dealer and most active stock in recent days.

Some of the deals included shares held by an estranged long-standing director of the group, who lost a major boardroom squabble recently and under regulatory review.

Vanguard quoted some of the shareholders of the bank who pleaded anonymity as saying: “If it is true that he is now the single majority shareholder it means that Otedola must have taken opportunity of the crisis that rocked the Board of Directors of First Bank of Nigeria Holding, FBNH, Plc.

“Otedola sold his 75 per cent direct and indirect shareholding in Forte Oil in 2019 through a merger of his business Zenon Oil with previous African Petrified Oil and they became all the more curious as to what his next move would be. He didn’t keep them guessing too long as he soon announced that he wanted to explore and maximize business opportunities in refining and petrochemicals.”

The shareholders further said: “Even though he also had investments in the real estate and financial sector, Otedola singled out First Bank for the single reason that there wasn’t exactly one man calling the shots there, unlike in other new generation banks.

“He wasted no time in taking advantage of the leadership crisis that rocked First Bank not too long ago leading to the Central Bank of Nigeria sacking both the chairman of the bank, Ibukun Awosika and Obafemi Otudeko, the chairman of FBN Holdings. Otedola made his movements, and today he is a better person as a result of them.”

Another shareholder of the bank said” Otedola made a decision to be the highest majority shareholder and approach those with bulk shares negotiate and buy from them. May be he also bought from the floor strategically.”

However, market pundits said the acquisitions by Otedola would possibly lead to no changes in the FBNH, citing corporate governance structure at the banking group, diverse shareholding and CBN regulations. As against other non-financial institutions, CBN reserves the primary approval right for any appointment unto the board and management of a regulated financial institution.

“This is not like the case of Forte Oil, he was practically the owner of Forte Oil but he is not holding the majority shares in FBNH, and I don’t think he has the financial muscle to attain a clear single controlling equity stake,” a dealer at the stock market said.

FBNH reported a profit after tax of N38 billion in the first half of 2021 up from N35 billion same period in 2020. Many believe that based on his antecedents from previously acquired entities, majority ownership of FBNH by an Otedola backed entity will probably usher in a transformation in the bank. This is expected to boost investor confidence.

The investment maestro has a pedigree going for him especially after successfully turning around Forte Oil and then selling it to new owners. He also acquired Geregu Power Plant during the privatization of 2013m which is today touted as one of the most efficient plants in the country.