Reports: Femi Otedola Takes Over First Bank Of Nigeria With N30 Billion

According to multiple sources with knowledge of the purchase, majority ownership of FBN Holding Company, owners of Nigeria’s oldest bank, First Bank, is about to be upturned following months of slow and meticulous purchase of the company shares on the floor of the Nigerian Stock Exchange by Otedola.

It was gathered that Femi Otedola is now the majority shareholder of the bank with an announcement imminent in the coming days.

The billionaire investor and turnaround specialist famous for taking over African Petroleum earlier in the century and turning it into a dominant player in the downstream space of the oil and gas sector has been mopping up shares of the bank for months gradually accumulating his ownership and surpassing shares owned by any other single shareholder of the bank.

Mr Otedola has been acquiring the shares of the bank through a vehicle, Calvados Global Services Ltd. It is also likely that there could be other vehicles associated with Mr Otedola who may have also been mopping up shares. FBNH currently has 34.7 billion of its shares floating freely meaning it is held by diverse shareholders. This makes the shares easy to acquire on the stock exchange.

The latest audited account of FBN Holdings does not have any shareholder with up to 5% of the ownership of the banking behemoth. Nairametrics understands Mr Otedola, through his proxies and investing vehicles, now owns over 5% of the bank, setting himself up to be the single largest shareholder of the bank. According to our sources, shares of FBNH have been mopped up over the course of the last 6 months when the share price traded at just above N7. However, rumours of an imminent takeover started to make the rounds among traders pushing up the share price of the bank to breach the N8 ceiling by end of September.

Nairametrics sources further revealed off-market block purchases ranging in the hundreds of millions of units were reported by traders with knowledge of the transaction even though it was not immediately clear who was behind the purchases.

As the rumours swirled in October, FBNH share price rose as high as N12 per share gaining 69% in two weeks.

Traders who spoke to Nairametrics on the condition of anonymity said most of the demand for the stock turned bullish when it became clear Mr Otedola might be behind some of the major purchases.

One particular trader suggests, investors see his potential takeover of the bank as a positive sign citing the same momentum that followed the share price of Forte Oil making it one of the best-performing stocks in 2013 after it achieved over 1000% share price growth that year.

According to our intelligence, the billionaire through various entities may have acquired over 5% of the bank at an average price of N9 per share. Sources also reveal to Nairametrics that Mr Otedola already owns over 10% of the bank. Nairametrics cannot immediately confirm the reliability of that information.

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 information contained in 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. Shareholders with over 5% ownership of shares of a publicly quoted company are statutorily expected to declare ownership publicly.

It is unclear what plans Mr. Otedola has for FBNH, but for him to have acquired this much, Nairametrics believes he has the full backing of the Central Bank.

The billionaire investor 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 2013 and it is touted as one of the most efficient plants in the country.

Relying 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 revving up investor sentiments in anticipation.

FBNH reported a profit after tax of N38 billion in the first half of 2021 up from N35 billion same period in 2020. According to Financial Times, institutional investors like Black Rock Fund Advisors, Old Mutual Investments Group all own less than 1% individually of the bank.


Leave a Reply

Please log in using one of these methods to post your comment: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s