Nigerian billionaire, Femi Otedola has apparently existed his recently acquired stake in Nigerian conglomerate, Transcorp Plc.
Nairametrics is reporting that Otedola existed his stake after apparently reaching a deal with another billionaire and Chairman of Transcorp Plc, Tony Elumelu.
It is reported that Otedola existed at prevailing market prices which makes him a tidy profit at the current share price. The share price of Transcorp Plc is now reacting to this news with an almost 10% drop in Friday’s trading on the NGX. It is now trading at N2.81 from Thursday’s closing price of N3.12
Now this situation is getting a bit murky, as the ordinary shareholders might have been misled to believe the press reports that Otedola was getting into Transcorp Plc for business reasons. Apparently, this was just a pump and dump deal, that probably caused losses for eager shareholders that jumped in the fray on account of all the press reports and share price movements.
Recall that early in April, Otedola first acquired a 5.52% stake in Transcorp Plc, which made him the single highest shareholder in the company. The stake was then increased to 6.3% in a second move by Otedola.
In public, Tony Elumelu welcomed the move but in private he was planning to neutralize it and preserve his position and grip on Transcorp Plc.
Tony Elumelu who has held controlling shares in the conglomerate through proxies, was then prompted make a move using HH Capital Limited to acquire 9,697,189,984 units of shares, which then brought the total shares held by the Elumelu faction to 9,991,173,177 units, with an announced controlling stake of 25.5%.
This new deal, if it is a new deal at all, apparently takes Otedola off the Transcorp Plc map and allows Tony Elumelu and his group to maintain a solid grip on Transcorp Plc.
The questions that need to be asked are surrounding the transparency of the transactions, and if any security laws were broken.
The entry of a new party on the board of Transcorp Plc would have prompted calls for more corporate transparency surrounding the management of the group.
Why has the group share price remained stagnant on the NGX all these years when the company has its hands in the lucrative power and oil and gas sector? What does this protectionist move signal to foreign investors about the transparency of the Nigerian market?
It is not clear what the exact situation is with Transcorp Plc, but we wonder the desperation to prevent an outsider from getting a board seat, and shaking things up at one of the nation’s biggest conglomerates with extensive interests in key power, oil and gas and hospitality sectors.