Billionaire businessman Femi Otedola has made shocking revelations about how fellow billionaire and owner of United Bank for Africa (UBA), Tony Elumelu, allegedly took over his shares in UBA and Africa Finance Corporation (AFC) after he went bankrupt in Nigeria.
In an official statement obtained by Investors King, Otedola disclosed that in 2005, while Elumelu was the Managing Director of Standard Trust Bank, he approached him for funds to acquire UBA. Otedola enthusiastically gave him $20 million, which was N2 billion at the time, to buy the necessary shares for the acquisition. After a short period, the share price moved up, and Otedola decided it was a good moment to sell and get out of the bank. However, Elumelu appealed to him to hold on to the shares as he was convinced that there were future prospects, and Otedola kept the shares.
Otedola also revealed that he became Chairman of Transcorp Hotel in 2007 with a shareholding of 5%, and unknowingly, Elumelu gradually started buying shares quietly. By the following year in 2008, Otedola went bankrupt in Nigeria, and Elumelu allegedly proceeded to take over his shares in UBA to service the interest on his loans. Elumelu also allegedly took over his shares in AFC, where Otedola was the largest shareholder.
Furthermore, Otedola disclosed that in 2012, Elumelu outbid him by offering to buy Ughelli Power Plant for $300 million after he had disclosed his intention to go into the power business. Otedola had offered to buy Transcorp Plc for N250 billion, but his offer was rejected.
Femi Otedola’s recent acquisition of 2.6 billion shares or 6.3% of Transcorp’s shares might be related to his revelation that Tony Elumelu took over his shares in UBA and Africa Finance Corporation. It has been alleged by an anonymous source that Elumelu paid Otedola a premium of 400% on Transcorp’s closing price to obtain his block of shares.
This would mean that Otedola received around N12.5 per share, resulting in a payout of approximately N32.5 billion for his 2.6 billion shares.
The revelations have raised eyebrows and stirred up tensions between the two business moguls. Otedola’s accusations paint Elumelu as a ruthless businessman who allegedly took advantage of his relationship with Otedola to take over his shares in UBA and AFC when he was vulnerable. It also raises questions about the fairness of business practices in Nigeria’s corporate sector.
Efforts to reach Elumelu for comment on the matter were unsuccessful. However, with Otedola’s allegations now in the public domain, it remains to be seen how Elumelu will respond and what actions will be taken by regulatory bodies to ensure transparency and accountability in the Nigerian business environment.
Femi Otedola Full Official StatementÂ
In 2005, while Tony was the Managing Director of Standard Trust Bank he approached me to get funds to acquire UBA. I enthusiastically gave him $20million, which was N2 billion at that time to buy the necessary shares in UBA for the acquisition. After a short period of time the share price moved up and I decided it is was a good moment to sell and get out of the bank. However, Tony appealed to me to hold on to the shares as he was convinced that there were future prospects – so I kept the shares.
I became Chairman of Transcorp Hotel in 2007 with a shareholding of 5% and unknowingly Tony gradually started buying shares quietly.
By the following year in 2008 I went bankrupt in Nigeria. Tony proceeded to take my shares in UBA to service the interest on my loans and he also took over my shares in Africa Finance Corporation, where I was the largest shareholder.
Shortly after, Albert Okumagba informed me that an American firm wanted to acquire my shares in Transcorp, which I then agreed to sell. However, this supposed American firm turned out to be Tony Elumelu. The revelation of this prompted me to resign as Chairman of the hotel.
Years later in 2012 Tony said he wanted to see me so we met in my office where I had previously had a meeting with foreign investors who had not yet departed the premises. Curious to know, he asked what sort of meeting I had had and I disclosed that I wanted to go into the power business, specifically Ughelli Power Plant. Tony quietly went ahead to bid for Ughelli and he outbidded me by offering to buy the plant for $300million.
And as a some would say: the rest is history.
Fast forward to the present…
I offered to buy Transcorp Plc for N250 billion, but unfortunately, my offer was rejected. My goal was to maximize the company’s potential as a Nigerian conglomerate with a market cap of at least N2 trillion instead of the current N40 billion, but it seems some shareholders have a different vision.
As a businessman, I believe in healthy competition and market dynamics. Two captains cannot man a ship, and I respect the majority shareholder’s decision to buy me out. This is the nature of the game.
But let me be clear: my offer was made with the best intentions for Transcorp Plc and its shareholders. I saw an opportunity to unlock the company’s full potential and create value for everyone involved.
It’s important for investors to understand that free entry and free exit are crucial to healthy markets. The scramble for shares after my acquisition is a testament to the value that Transcorp Plc can offer, and I hope the company continues to thrive under new leadership.
My message to Transcorp Plc and its shareholders is this: I remain committed to the growth and success of Nigerian businesses, and I will always be looking for ways to create value for all stakeholders. Stakeholders are unfortunately always shortchanged by getting stipends while the owners and managers of the business live a jet set lifestyle, which is detrimental to the stakeholders. Thank you for the opportunity to engage in this exciting chapter of Transcorp’s history.
FO
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