What does Femi Otedola want?

I sat in front of a huge investment banker discussing my new plays coming up in London when suddenly he looks at his system and exhales – ahhhh, First Bank is on fire. What does Otedola want?

That has continued to be the question that has bugged me since First Holdco shares literally caught fire.

What does he want, even as I put a call through to him yesterday and he replies in Yoruba – ‘ma pe e pada, mo wa ni meeting’ (I will call you back, I’m in a meeting).

He never calls back, not that I expected him to, even as I continue to ponder the question: what does he want?

He has gone against very fundamental boundaries in Business; to the best of my knowledge, he seems to have streamlined his exposure – exiting Geregu and pushing almost all he has into First Holdco.

Apart from maybe a smattering of investments here and there, and possible large real estate holdings internationally and a reported planned investment in his friend Dangote Refinery, the vast bulk of his exposure could most likely be in First Holdco, bulking the simple business risk of concentration.

But what does Otedola want?

As I look at the amazing figures this morning, I see much more than wealth creation and ownership of an iconic institution but a…..

Let me hold that first and regale you with the figures just in case you have been living under a rock and have not seen the figures.

So far, Mr Otedola has spent $160 million of his own money, not loans, lifting his stake from $1.07 billion to $1.08 billion.

He has so far acquired 1.7 billion shares, spending N222. 21 billion, making that the largest single purchase. His total holdings stand at 11. 9 billion shares from 10.1 billion, with a total valuation now standing at N1. 4 trillion.

Just this week, his FirstHoldco overtook Zenith as the most valuable.

With this positioning, he can push to trigger the Exchange 30% rule, which allows him to make an offer for the rest of the shares.

All he needs is 13. 5 billion out of the threshold of 45.5 billion to do this.

What does Otedola want, I keep asking as I peruse these figures.

Follow me.

On Tuesday, FirstHoldco closed with a Market Cap of N5. 7 trillion ahead of Zenith, which stood at N5. 2 trillion and GTB at N4. 8 trillion. Some critics have said – Femi is just pumping up these prices, taking advantage of the obtuse float situation in the market to drive the prices and mop up at artificial levels.

But then again, I run to his results, and they seem to put a lie on those assertions. It appears that this price rally rests on earnings, not priced in pre tax profits.

They made N653. 5 billion for 6 months, an increase of 83.5% on 356.15 billion year on year. The second quarter PBT hit 95%.

In response, the share gained 165% year-on-year, climbing to N127 up from N47.9, reflecting shares issued but not necessarily value.

Now what we need to really look at at this point is its impact on those holding the shares, which is the main issue in all of this.

A cursory look at First Holdco’s earnings per share and you will see N8. 86 as against Zenith’s N7. 64, with a trailing 12-month N25. 37, a far cry from First Holdco’s  N1. 09 as a result of its massive impairment charge same time last year.

But PE ratio-wise, which measures the number of years it takes to recover investments, GTB at 5.44x and Zenith at 4.5x make both a better buy for the long-term investor since FirstHoldco’s PE stands between 10.1x and 14.4x, offering less intrinsic value for the buy/hold institutional investor.

That said, and back to the overriding question in this essay, what does Otedola want?

I think the answer is buried not too deeply in his best-sellerbook – making it big, lessons of a life in business.

If you read that book very carefully, you will see an impairment which, rather than provide a barrier, serves as a fuel that triggers inordinate ambition.

He found out very early that the academic challenge wasn’t for him, so he decided to follow his instinct of carving out opportunities and maximising them.

From a commissioned agent in his father’s Printing business, to finding himself in credit, down to diesel, which gave him fame and astounding wealth, to real estate and later Finance, you would see a man struggle to prove a point in a paper qualification-driven environment and show that despite that perceived challenge, he can win at the game.

If you now take that energy and mix it with the stubbornness hewn from the streets and a superb spirit for competition, you just might understand what he wants.

It’s a huge journey of proving a point, a digging in and a thumb in the eye of elitist academic snobbery that leads to the rubbishing of economic aristocracy – key in the sacks, key in the abrupt sell off, key in the advocacy – bankers should not own private jets, key in the disrespect for top bankers and you get a very strong psychological need to rise to the top and stay there while making sure that academic elitist snobbery is exposed for what it is – vapour.

If I’m correct, would it be right?

I have no answer and would not even attempt it, as every man has a right to his demons, especially as this particular demon is not only oiling a system, creating wealth, it’s also proving a strong point that needs to be made at this point, and if I am wrong, then he can… come and beat me.