Energy Magnate, Femi Otedola has spoken publicly for the first time after he acquired Transcorp Plc shares. In a tweet about the acquisition, he said, “Following this acquisition I look forward to working with the board and management of Transcorp to realise the amazing future potential of the corporation.”
With 6.3% of issued shares, Mr. Otedola stands as the largest individual shareholder in Transcorp above Mr. Tony Elumelu who directly and indirectly holds 2.06% of the company.
Also Read: Tony Elumelu Says Transcorp to Power 25% of Nigerian Homes
Mr. Otedola is known for his discreet off-market purchases that involve significant ownership stakes. In October 2021, he gradually acquired shares of FBN Holdings until it amounted to over 5% by the end of the month. This caused a stir, as he became the largest shareholder in the company.
As he pulls the same stunt in Transcorp, the question remains what is the gameplay? Is he attempting to usurp control of Transcorp from Elumelu, or is it simply a harmless act of a billionaire investing in ventures that pique his interest?
Tony Elumelu and Femi Otedola have maintained a cordial relationship over the years, with business interests in parallel sectors. Tony Elumelu shot up his net worth through his acquisition of Standard Trust Bank which later became United Bank for Africa (UBA). Femi Otedola’s wealth is linked to his significant stake in the defunct African Petroleum Plc, which later became Forte Oil Plc. Otedola sold his stake in Forte Oil to follow his interest in Nigeria’s power sector with his acquisition of a power generation plant, Geregu I Power Plant which he has transformed into Geregu Power Plc.
However, with the privatization of many government assets in the Obasanjo era came the creation of the Transnational Corporation Plc which is a diversified conglomerate with investments in the hospitality and energy sectors. Transcorp was incorporated in 2004 as a publicly traded company with a large base of shareholders (over 300,000). By 2012, Tony Elumelu gained control over the company by being the largest individual shareholder as well as UBA Nominees, the global investment arm of UBA Group being the largest institutional shareholder in the company.
With Transcorp, Elumelu has made an incursion into Otedola’s playground, the energy sector. However, the two billionaires are not in competition with each other as Nigeria’s energy sector, particularly power is still in need of significant investment. The issue with Otedola’s acquisition of Transcorp’s shares is the whole drama that followed.
Also Read: Otedola Increases Stake in Tony Elumelu’s Transcorp to 6.3%
First of all, it took the company two weeks to acknowledge the purchase of the shares. Then, Otedola released a statement after the purchase in which he questioned the steps taken by the company. In the statement, he noted,
“Shareholders of the conglomerate may recall that on April 13th, Transcorp responded to NGX’s request to confirm media reports that an individual had acquired over 5% of the company’s shares,
“Although Transcorp did not explicitly acknowledge the acquisition, the management initiated a series of actions that have raised curious concerns. On April 18th, the company hastily announced that a board meeting initially scheduled to be held on May 4th, 2023, had taken place on April 17th, 2023.
“They then immediately approved the first quarter 2023 results and released them to the public. Is NGX aware of these actions by Trancorp?”
He continued by raising concerns about the implication of the company’s actions,
“While this may not appear to be alarming on the surface, we are concerned about the implications of these actions. Transcorp had declared a closed period from April 1st, which meant that no member of the board or management could purchase shares of the company.
“However, by publishing the results on April 18th, the closed period ended 24 hours later, allowing insiders in Transcorp to purchase shares of the company.
“If they had waited until May, as previously scheduled, the closed period may have been extended until next month, making it impossible for insiders to buy shares of Transcorp.”
“Therefore, any well-meaning investor may question whether the board and management of the company brought forward the closed period for personal reasons, or if this was done in the best interests of shareholders, or the best interests of individuals who are only interested in their selfish interests.
“We must ask, is the NGX aware of this action taken by Transcorp?”
With Mr. Otedola’s voiced concerns over some of the actions taken at the company, it is obvious there is an internal rumble between superior stakeholders in the company.
Also Read: Transcorp Hotels to Lay Off 40% of Staff As Coronavirus Pandemic Hurts Business
Despite all of the ramblings, the actions at Transcorp have churned out good returns for the company. Transcorp Plc’s stock has become the most traded stock in the Nigerian Stock Exchange in 2023. Transcorp Plc’s year-to-date performance at the stock market has seen the company’s share price grow by 117% in 2023.
Meanwhile, the controlling investor, Tony Elumelu has remained silent despite all the happenings at the company. On April 17, Femi Otedola posted on Instagram and Elumelu replied in a bantering tone “enjoyment,” giving off an impression that there was no love lost between the two businessmen.
