Judul : What Otudeko's exit means for First HoldCo - Shareholders
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What Otudeko's exit means for First HoldCo - Shareholders
Shareholders of FirstHoldCo have reacted to the report of the exit of a key shareholder and former First Bank chairman, Oba Otudeko, who was said to have sold off his shares worth N323.33billion in First Holdco.
Daily Trust reports that in the block deal on the Nigerian Exchange Limited on Wednesday, the transaction saw 10.43bn ordinary shares of First Holdco traded in 17 off-market, negotiated deals at an average price of N31 per share.
The block deal represents a 25 per cent majority stake in the financial holding company, which has 41.87bn outstanding shares.
Daily Trust reports that no official statement has been issued on the transaction reportedly bought by the Chairman of First HoldCo, Femi Otedola.
The buyer in all 17 deals was First Securities Ltd, while the sellers included CardinalStone Securities, Meristem Stockbrokers, Renaissance Capital, Regency Asset Management, Stanbic IBTC Stockbrokers, United Capital Securities, and First Securities Ltd (acting as both buyer and seller in select trades).
The negotiated window on the NGX allows parties to pre-arrange the price and terms of large-volume transactions before formal execution on the exchange.
The transaction clears the path for Otedola, currently the largest individual shareholder, to consolidate his control within the group.
Between the late 2000s and early 2020s, First Bank's balance sheet came under pressure from a string of 'non-performing insider-related loans' to companies allegedly linked to Otudeko.
The loans included Aiteo Group with reported exposures exceeding N150 billion; Seawolf Drilling, a deepwater oil services firm that collapsed under debt; and Investors International London Limited (ILL), which failed in its bid to acquire NITEL in 2001.
The Central Bank of Nigeria (CBN) had intervened in 2021, dissolving the board of First Bank and reinstating its managing director.
The apex bank cited corporate governance failures and insider abuse as major concerns.
In December 2021, Otedola became the single largest shareholder after acquiring 7.57 percent of the issued shares capital of FBNH.
But in July 2023, Otedola lost his position to Otudeko, who acquired 4.7 billion shares of FBN Holdings.
Some FBN Holdings shareholders protested after Otudeko purchased 4,770,269,843 units of FBN Holdings' shares through his Honeywell Group.
The purchase brought the stake held by the company in the premier bank to 13.3 percent.
However, a few days after the purchase, Ecobank wrote a letter to FBN Holdings, asking the bank to reject Otudeko's bid to become its largest shareholder.
In July 2023, the Securities and Exchange Commission (SEC) said it was investigating the acquisition of 4.77 billion shares of FBN Holdings by Otudeko.
On January 31, 2024, First HoldCo appointed Otedola as the new chairman of its board.
In January, the EFCC dragged Otudeko to court over allegations of a N12.3 billion fraud.
Otudeko alongside Stephen Olabisi Onasanya, a former Managing Director of First Bank, a former Honeywell board member, Soji Akintayo, and Anchorage Leisure Limited, a firm linked to Otudeko.
The EFCC had filed a 13-count charge against the defendants, accusing them of obtaining credit facilities under false pretences and laundering the funds between 2013 and 2014 in Lagos.
According to the EFCC, the defendants conspired to defraud First Bank of sums in tranches of N5.2 billion, N6.2 billion, N6.15 billion, N1.5 billion, and N500 million. They allegedly presented forged documents and misrepresented transactions to facilitate the fraudulent activities.
The charges, filed by EFCC counsel Bilikisu Buhari, allege violations of the Advance Fee Fraud and Other Fraud-Related Offences Act 2006 and the Money Laundering (Prohibition) Act, 2011 (as amended).
In March, JJustice Chukwujekwu Aneke of the Federal High Court in Lagos adjourned for a report of settlement in an alleged N12.3bn fraud case against Otudeko, and three others.
The latest transaction is expected to lay the litigation to rest.
FirstHoldco shares surge over 20% amid Otudeko's exit
Shares of First Holdco have soared by more than 20 per cent in just two trading sessions, following heightened investor interest triggered by a landmark ?323.33bn off-market transaction that reshaped the company's ownership structure.
The stock, which closed at ?29.30 on Monday, rallied to ?32.20 by Wednesday and climbed further to ?35.40 during the trading on Thursday.
The sharp price movement reflects strong market optimism surrounding the exit of Oba Otudeko, a long-time key shareholder, and the potential implications of new leadership at the helm of Nigeria's oldest financial group.
The rally follows the execution of one of the largest block transactions in Nigerian capital market history. Through the Nigerian Exchange Limited's negotiated window, 10.43 billion ordinary shares-representing 25 per cent of First Holdco's 41.87 billion outstanding shares-were traded in 17 off-market deals at an average price of ?31 per share.
The strategic transaction, widely interpreted as the final phase of Otudeko's exit from the group, has shifted investor attention toward a possible consolidation of control by billionaire investor Femi Otedola, who is now the most prominent shareholder in First Holdco.
Shareholders weigh in
Speaking with Daily Trust, Moses Igbrude, the National Coordinator Independent Shareholders Association of Nigeria (ISAN), described the transaction as a win-win situation for both parties in the interest of the institution.
He also noted that the transaction would bring stability to the financial institution.
He said 'Both parties have made sacrifices for the institution to survive. And it's something we have to commend.
'Yes, whoever has bought at the price of that time, the premium price of 31. There's a need for the business to run well in order for him to benefit.
'There's going to be stability for the bank because this time distraction would no longer be there; the management would focus and there would be stability and where there is stability there is going to be improvement.'
'Abuse of corporate governance must be avoided'
On his part, former secretary of Independent Shareholders Association of Nigeria (ISAN), Adeleke Adebayo warned that the legacy institution must be protected and abuse of corporate governance processes must be avoided.
Adebayo said 'It's all about market dynamics. Even though there are certain circumstances, it's still a free market. However, the legacy institution must be protected and abuse of corporate governance processes must be avoided.'
Also speaking, another shareholder, Pastor Samson Adegoke said, 'We investors, we don't have anything to do than to continue to pray. In the stock and capital market today, their determination is to go there and rule the company or the bank. That's their mission, may God help us.
'We are optimistic that the bank will recover from all the issues, because there are a lot of debts, but I believe that the bank will recover.
'Going forward all the board and management should have the fear of God. There are some things that also ruin some companies and banks, regulatory authority, tax and others. Apart from debt, companies and banks can recover all their debt. If the tax is not so much, even the investors will enjoy it and then we would be collecting our dividends.'
Provided by SyndiGate Media Inc. (Syndigate.info).Thus the article What Otudeko's exit means for First HoldCo - Shareholders
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