Nigeria’s leading conglomerate, Transcorp Plc, concluded its Annual General Meeting (AGM) under auspicious circumstances, despite initial concerns that things could go wrong.
The company’s planned AGM, which was scheduled for April 26th, 2023, occurred in the heat of a scramble for shares of the company after it confirmed the acquisition of 5.05% of the company by Femi Otedola.
Billions of units of Transcorp shares continued to exchange hands on Wednesday as the AGM was held, continuing the race for control of the ownership of the company. On Tuesday, April 25th, Nairametrics’ findings confirmed that about 1.5 billion units of Transcorp shares valued at about N2.45 per share exchanged hands in an off-market trade.
On Wednesday, April 26th, 2023, another 5 billion units exchanged hands in yet another off-market trade at the same price of N2.45 per share. The share price closed at N2.95 per share and is now trading at a price-to-earnings multiple of 16x.
The 17th Annual General Meeting (AGM) of the company was held via an online video streaming application and was also broadcast on YouTube. This was in line with Section 11 of the Business Facilitation Act, which empowers public companies to conduct AGMs electronically. It was the first time an AGM was held virtually.
In attendance were the directors of the company, its executive management, and representatives of NGX, the Securities and Exchange Commission, and the Corporate Affairs Commission (CAC).
The meeting started after prayers by the deputy chairman and various introductions and pleasantries. The company passed several resolutions, including giving the board and management of the company the authorization to invest in, acquire, or divest from any business and/or carry out any actions, including but not limited to restructuring, reorganization, reconstruction, and such other business arrangement exercise or actions, as the Directors may deem appropriate and in accordance with any relevant laws.
Total proxy votes represented about 62% of votes, while the balance of the votes was cast by shareholders who logged in online. All 6 ordinary resolutions were passed by majority shareholdings without any drama during the AGM.
Sources close to the Transcorp team informed Nairametrics that the organization of the AGM was meticulously planned as it was the first virtual AGM held after the passage of the law allowing such by President Buhari. The smooth organization was observed in the way the meeting was handled by Tony Elumelu, starting and ending in about one hour and sixteen minutes.
It was not mentioned at the AGM that the second majority shareholder, Mr. Femi Otedola, was not in attendance. No mention of his name or admittance of his shareholding was also discussed at the AGM. However, Mr. Elumelu mentioned that he was happy the stock price is the “toast of investors” and he was impressed with the growth of the stock price. He thanked the board and management for this achievement.
What they are saying
As expected, immediately after the AGM, the major stakeholders of the company went on social media to comment on the concluded AGM.
Mr. Elumelu, on his Instagram handle, posted “Candid moments with Owen Omogiafo, CEO Transcorp Group, after a successful Annual General Meeting.”
Dr. Omogiafo, on her own Instagram handle, expressed her happiness about the success of Transcorp as an attraction to investors.
“I am happy that today, through your dedication, commitment, and hard work, Transcorp has become the toast of investors. On behalf of the Board, I’d like to say thank you to our management. We pass our vote of implicit confidence in the management of Transcorp Plc.”
Around the same time the AGM was being concluded, Mr. Otedola posted a message on his Instagram account stating “Stakes are going higher,” which attracted over 1,373 comments. Otedola’s post also featured a video from Arise TV that showed the trajectory of the share price of Transcorp.
Among those who posted comments was Afrobeats musician Mr. Eazi, who stated “The pressure is getting worse.” Mr. Eazi is known to be dating Temi Otedola, the daughter of Femi Otedola.
The billionaire recently said that he is looking forward to working with the board and management of Transcorp to realize the amazing future potential of the corporation.
Mr. Elumelu followed his Instagram post by granting an exclusive interview with Arise TV, using that as an opportunity to discuss the results of the company and the acquisition of shares of the company by Femi Otedola.
On what he thinks about Femi Otedola’s acquisition of Transcorp shares, he expressed his friendship and admiration for Mr. Otedola, stating that he welcomes his investments.
Below are key highlights of his comments on Femi Otedola’s acquisition of his shares.
- “I welcome Femi’s investment in Transcorp. That is what we want, come on, people get sentimental sometimes.
- “I am happy to see an indigenous active investor community, and I am happy that Femi is investing locally and should be commended for that.”
- “And I welcome his investment in Transcorp because the more people show interest in the activities of the performance of the company, the better for all shareholders.”
- “I look forward to working with him to take Transcorp to greater heights.”
Despite the seemingly cordial relationship between both men and the appearance of mutual interest in working together at Transcorp, sources indicate there is continued jostling for the shares of the company, as evidenced by the billions of shares traded this week.
Mr. Otedola responded to Elumelu’s pleasantries in an Instagram post on Thursday stating as follows “well done @tonyoelumelu, my friend and astute investor. The admiration and respect are mutual. One love bro d.
What traders are saying
Nairametrics spoke with some shareholders who also shared their views on the increase in Transcorp shares and the volumes of shares being traded.
Mr. David Adonri, Executive Vice Chairman of Hicap Securities Limited, reacting to the development in a chat with Nairametrics, opined that there is a struggle for controlling ownership of the company.
Adonri noted that the big players in the company are mopping up all the shares from every angle to shore up their ownership stake, and this might positively impact the fundamentals of the company.
- “This struggle for ownership will fuel a massive improvement in the fundamentals of the conglomerates together with the unfolding prospect.
- Tony Elumelu is thought to be the one beefing up the ownership stake amidst a threat from Femi Otedola. This is clear because United Capital Securities which negotiated both deals as buyer and seller are part of UBA Group which Elumelu sits on the board,” he said.
However, checks on the NGX exchange suggest Elumelu may not be the one buying the stock as no insider declaration was made by Transcorp on the Exchange. Any share sale or purchase by insiders in listed companies requires a mandatory declaration on the Exchange.
The Managing Director, of Crane Securities Limited, Mr. Mike Eze also reacting to the development told Nairametrics that some investors are jostling for the board of directors’ position, adding that the development is normal.
- “It is a normal market situation in every market because institutional investors, high net-worth investors, or foreign investors may decide to buy large shares for obvious reasons, maybe they want a seat on the board of the company, maybe there is insider information about likely huge returns on the investment. So any of these classes of investors may decide to buy a large number of shares. Sometimes it may be speculative. A group of such investors may decide to speculate on the stock, drive the price high and upload and make a huge margin. By and large, the reasons for such movement could be listed as craving for a seat on the board, speculation, and interest,” he said.
Finally, the events at the AGM of Transcorp while controversial have aroused excitement in a rather dull stock market that has experienced limited trades on the back of the national elections and cash withdrawal limitations.
I don’t think it’s the company’s fundamentals driving the price surge, but the interest in the conglomerate by the man who appears to have the midas touch seems to be the main driver. In my opinion, it appears that Mr. Elumelu was taken aback by Mr. Otedola’s huge interest, but I believe they’d be able to work together in the interest of the organisation.
Nairametrics should educate its readers on the new Business Facilitation Act, the pros and cons of conducting of AGMs virtually (using the latest Transcorp AGM as a case study), and other possible impacts.