Otedola Losses N1.29bn As Investors React Negatively To Transcorp Acquisition

First Bank Holdings Appoints Femi Otedola As Board Chairman
First Bank Holdings Appoints Femi Otedola As Board Chairman

Shares of First Bank of Nigeria (FBN) Holdings crashed in the Nigerian capital market this week after reports emerged that billionaire businessman, Femi Otedola, was mopping up shares in another equity, Transnational Corporation (Transcorp).

The week before news filtered in that Otedola had bought shares in Transcorp, First Bank shares appreciated by 0.4 percent from N11.05 to N11.10 kobo.

The development pushed FBN to the top of the gainer’s list in the capital market.

FBN’s share traded flat on Tuesday, but following reports that Otedola, who has the highest stake in First Bank Holdings, is ready to splash the cash on Transcorp shares, investors in the capital market developed cold feet towards FBN’s shares, leading to its crash from N11.10 kobo to N10.45 kobo per share on Friday.

Friday’s output was the institution’s lowest in 2023.

The decline in the share wiped off N23.33 billion from the total equity investments held by shareholders in the commercial bank.

Otedola accounted for N1.29 billion of the N23.33 billion lost by the lender as investors’ interest in its shares waned.

The value of the businessman’s investment in First Bank Holdings dropped from N22.19 billion to N20.89 billion during the period.

The apprehension among capital market investors could be linked to Otedola’s decision to sell N7.96 billion FBN shares last year after he agreed to buy one of the power plants in the National Integrated Power Projects (NIPP).

Since the maverick businessman sold FBN shares, his first public investment is Transcorp Plc, a firm with investments in the Nigerian energy sector.

With his investment in Transcorp, many believe Otedola has now regained the key to the country’s energy sector months after his power company, Geregu, lost N23.33 billion to a force majeure declared by Shell Petroleum Development Company Limited (SPDCL) in Niger Delta.