Business & Finance

The amazing strategy Femi Otedola used to acquire majority shares of First Bank Holdings

Written by Ade

Femi Otedola, Founder and Chairman of the Geregu Energy Group, acquires, the majority shares of FBN Holdings (FBNH), right under the noses of bitter rivals struggling for the control of Nigeria’s biggest bank

Ade Ishola

For many, especially close watchers of the Nigerian stock market, the content of the letter dated Thursday December 9, 2021 written by Chairman of Geregu Energy Group, Femi Otedola, to the Group Managing Director of FBN Holdings Femi Otedola, was no surprise.

In the letter, Otedola, whose business interests span power generation, oil and gas, real estate and now banking, informed the management of the First Bank Holding company of his shareholding status in the company.

His shareholding, now totaled 2.717 billion units or 7.57 per cent of the company’s shares, made up of his direct personal holding of 210 million shares, 1.989 billion units through Calvados Global Services Limited, 170 million units through Primrose Global Concept, 175 million units through Shetland Global, 120 million units through Wells Properties and 53 million units through Impetus Synergy.

“I have recently acquired additional shares in FBN Holdings Plc (the Company) which has brought my total stake to 7.57 per cent of the issued shares capital of the Company.

“Section 120 of the Companies and Allied Matters Act requires that I give notice in writing o the Company stating amongst other things, the particulars of the shares held by me or my nominees by virtue of which I am a substantial shareholder,” Otedola said in the letter.

Even though by the time Otedola officially issued the letter, it was no longer news, the shocks in business circles was how he went about increasing his stockholding in the company, with his running battle with Tunde Hassan- Odukale, the chairman of First Bank of Nigeria Limited, a subsidiary of FBN Holdings, for the control of the bank/holding company.

Investors and stock market watchers only became aware of Otedola’s move to acquire a large portion of the company’s shares in October this year, when he was forced by law, when his shareholding reached the maximum 5 per cent statutory level to reveal that he was behind the investment vehicle, Calvados Global Services Limited, which was then strategically buying the bank’s shares.

Even though this made other major shareholder to be on their guards, as they feared a take-over bid by the business magnate, they were still caught unaware by his next move.

Hassan-Odukale’s group, which was hitherto the largest stake owners in the bank could only legitimately lay claim to 4.21 per cent of the company’s stock as the authorities- Nigerian Stock Exchange and the National Pension Commission, have declared that the group’s claim of 1.15 per cent holding belonging to Leadway Pensure PFA (a company majority-owned by the Hassan-Odukale’s family) , was funded from a pool of employees’ pension contribution and cannot be said to belong to a single individual.

Tunde Hassan-Odukale

Otedola was not only using Calvados to buy the First Bank’s shares other investment vehicles were also being used. These include Primrose Global Concept, which now owns 170 million units; Shetland Global, 175 million units; Wells Properties, 120 million units and Impetus Synergy, 53 million units. These were used to acquire the additional 2.5 per cent holding in the group, which has now made him the undisputed majority shareholders in the group. He bought few units in his own name so as not to draw the attention of rivals.

Market watchers believe these deft moves by the major shareholders were for who control the holding company’s jewel, First Bank of Nigeria and who is the chairman of the bank. The position was a bit unstable now after there was a major board reshuffle by the intervention of the Central Bank of Nigeria in May this year.

Otedola stated in his latest letter to FBN Holdings that he is in the process of getting approvals from regulators including the Securities and Exchange Commission and the Central Bank of Nigeria (CBN) and informing the Corporate Affairs Commission.

These moves by the two biggest shareholder-groups has also brought some financial gains to the little shareholders as the demand and prices for FBN Holdings shares have jumped up on the stock exchange. About 5 billion units were traded in the last two months with the market price rising by 65.3 per cent. It is the most active share of the 156 stocks listed on the Nigerian Stock Exchange. FBNHoldings currently has 34.7 billion of its shares listed on the exchange.

 of the bank, setting himself up to be the single largest shareholder of the bank.

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Ade

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