Article summary
- Femi Otedola has acquired 5.52% of Transcorp shares, making him the second largest shareholder of the company.
- The transaction was consummated between an entity owned by Otedola and AMCON.
- The acquisition of 5.52% of Transcorp suggests that the billionaire investor is likely to set the stage for another bidding war for control of one of Nigeria’s indigenous and most recognized conglomerates.
Billionaire investor Femi Otedola has acquired 5.52% of Transcorp shares making him the second largest shareholder of the company.
Nairametrics reported on Tuesday that a trade of about 1.5 billion units of Transcrop shares valued at about N2.1 billion crossed at the close of trading on the 11th of April. Another 115 million units of the stocks crossed on the exchange closing at N1.4 per share.
On further probing, Nairametrics can confirm that the transaction was consummated between an entity owned by Femi Otedola and an unnamed seller. Another source however confirmed the transaction reported on Tuesday was AMCON related.
Reliable sources with knowledge of the transaction inform us that the billionaire now owns about 2.245 billion shares representing 5.52% of the company. According to company records, the only other shareholder with over 5% ownership of the company is UBA Nominees which owns about 9.25% of the company as of December 2022.
No other shareholder held above 5% according to our records. The company also has about 39.65 billion out of its 40.65 billion outstanding shares on a free float. In fact, 1,695 people own about 89% of the company’s shares.
Why this matters?
With the acquisition of 5.5% of Transcorp, sources suggest the billionaire investor is likely to set the stage for another bidding war for control of one of Nigeria’s indigenous and most recognized conglomerates.
Transcorp is currently controlled by billionaire investor Tony Elumelu who took over control of the company in 2012. Since then the company has gone on to acquire a power generation company and branched into the oil and gas sectors of the economy.
Femi Otedola also recently acquired significant control of FBN Holdings early last year when he announced he had acquired shareholdings above the 5% threshold. That also immediately triggered a bidding war for the stock. However, unlike FBN Holdings, Transcorp has a single majority shareholder with control of the company.
Mr. Otedola also owns a close to 90% stake in Geregu Power Plc which it recently listed on the Exchange last year. It is unclear if the latest acquisition is aimed at doubling down his investment in the power sector.
Nairmetrics could not immediately obtain comments from Transcorp or from Femi Otedola’s team. We understand the acquisition could be made official within 24 hours.
Latest results
Transnational Corporation Plc (Transcorp) released its financial results for the full year ended December 31, 2022, showing the Group’s total revenue rose by 21% from N111.2 billion in December 2021 to N134.7 billion in the period under review.
Its operating profit also experienced significant growth, rising from N38.5 billion in December 2021 to N46.7 billion in December 2022.
Its profit before tax rose by 8% to N30.3 billion compared to N27.9 billion in December 2021, however, profit after tax fell from about N23.8 billion to N16.8billion
We are on the road to spin off of Transcorp Energy Plc. If that happens then FO may consider merging with Geregu, which would create a behoomoth of an operator with economies of scale For now, the two can exist side by side to find their footings