Otedola Increases Stake in First Bank, Now Holds, 7.57 Percent in FBN Holdings

The corporate industry is not immune to power tussle, as wealthy and influential people in different economic sectors go head to head with shares and stakes. Femi Otedola, the billionaire investor and the Chairman of Geregu Power Plant, has once again increased his stake in FBN Holdings (the parent company of First Bank) to 7.57 percent. This makes him the single largest majority holder in the bank, according to public disclosure of ownership.

Femi Otedola and Tunde Hassan-Odukale, the Chairman of First Bank and the Managing Director of Leadway Assurance Company Limited, have been in a sort of tussle concerning First Bank shares for quite some time.  Femi Otedola acquired 1.81 billion shares earlier in the year through his investment vehicle, Calvados Global Services Limited. However, the share acquisition was surprising as neither Otedola nor First Bank informed the Securities and Exchange Commission (SEC) or the Nigerian Exchange Group (NGX) during the acquisition process.

The possibility of Otedola taking over did not sit right with Tunde Hassan-Odukale and his supporters, as a letter later appeared online that Odukale was the largest shareholder in First Bank Holdings, but this claim was not supported by the financial statements released from 2020 to 2021.

The letter was quickly recognised as an attempt to push back Otedola, who was all out to own a sizeable chunk of the leading financial institution.

After reports that Otedola was set to take over and the letter claiming that Odukale has more than 5%, First Bank released its own report denying any such shareholder but later acknowledged that Otedola has revealed the number of his shares.

Later on, First Bank confirmed that both Otedola and Odukale were in possession of more than 5% controlling stake.

To be precise, Femi Otedola’s stake in FBN Holdings was 5.07 percent at the time. However, news started going around that Seye Kosoko, the company secretary had attributed Leadway Pensure PFA’s entire 2.11% stake in the bank to Tunde Hassan-Odukale in a letter forwarded to the Nigerian Exchange limited (NGX).

That would have taken Tunde Hassan-Odukale’s total shares to 5.36%, which would have made him the single largest shareholder in the company as it would have totaled higher than Femi Otedola’s stake which was at 5.07% at the time.

However, the National Pension Commission (Pencom) confirmed that any funds invested in First Bank Holdings by Leadway Pensure Ltd belong to the holders of Retirement Savings Accounts (RSA). This confirmation silenced any claims that Odukale owned a stake of up to 5.36%.

First Bank also went ahead to explain that it did not list Tunde Hassan-Odukale as a 5% holder, but divided and recorded his shares as 4.16% (direct, personal shares) and 1.2% for Leadway shares.

Naturally, holding a stake of more than 5% in a company like First Bank is likely to give one a sense of power and control given the numerous investors in the leading bank.

Otedola has been an active participator in the Bank’s dealings. In October, he placed on record that he had invested the amount of $30 million in the bank’s long-term debt instrument, which was classified as Tier II capital and which makes a vital portion of the bank’s capital base.

Otedola said he made the investment due to his faith in the Nigerian economy which he termed as resilient and with a bright future. He urged people to look into the future, stating that the security challenges plaguing the country will be resolved and the country will once again receive its glory status.

The power tussle is ongoing as both sides have made moves and responded to the moves of the ‘opposition’.

A report made on December 11 revealed that about 1.1 billion units of First Bank of Nigeria Holding shares had been exchanged in only four days. This suggests that the battle for control of the bank is still ongoing, with no end in sight. The data was gathered from the daily trade volumes that were recorded by the company on the Nigerian Stock Exchange’s trading engine.

The data shows that 128.8 million units were traded on Monday, with 364 million units coming on Tuesday. Wednesday saw the trade of 441.9 million units and Thursday witnessed 228.5 million shares traded.

The power tussle however took another turn on December 9, 2021. Femi Otedola announced in a letter addressed to the bank that he had acquired additional shares in the company which now gives him an ownership of 7.57% in the bank.

According to market operators, Otedola has the right to purchase additional shares from the secondary market if they are available in order to increase his holdings in the bank. However, a Spokesperson for the Nigerian Exchange Limited (NGX) stated that the NGX was not aware of the acquisition and was therefore unable to comment.

In the letter, it was seen that Otedola acquired these shares through his proxies Calvados Global Services, Primose Global Concept, Shetland Global, Wells Properties and Impetus Synergy. The letter read, “I have recently acquired additional shares in FBN Holdings Plc (the Company) which has brought my total stake to 7.57% of the issued shares capital of the company.”

After this acquisition, it has been revealed that Femi Otedola has now spent a huge amount of N44.8 billion on investment in FBN Holdings Ltd. Since he has announced the acquisition of 2.7 billion shares, the average price at which he has acquired the FBN Holding shares is N16.48 per share. In comparison, the share price closed at N11.6 per share yesterday.

This new purchase has formally solidified his status as the biggest shareholder of FBN Holdings, very well ahead of his biggest rival in the company, Tunde Hassan-Odukale who is the Chairman of First Bank. Tunde Hassan-Odukale and Femi Otedola have been going at each other since October, when the news of Otedola’s share acquisitions became public knowledge late in the month.

It would be interesting to see how Tunde Hassan-Odukale responds to Otedola’s new acquisition. Following the trajectory of the power tussle, it would be unsurprising to see Hassan-Odukale either announce some new shares or begin the process of acquiring additional shares. However, at the moment Femi Otedola remains the man witrh the title of biggest shareholder.