Shareholder groups advise Otedola on Transcorp stake acquisition

Some shareholder groups have hailed the acquisition of a 5.52 per cent stake in Transcorp Corporation Plc by billionaire businessman, Femi Otedola.

They also advised the business mogul to work with the existing shareholders to move the conglomerate forward.

In a corporate notice on Thursday, the conglomerate announced that Otedola had bought 2,245,639,251 units of the shares of the group, which amounts to a 5.52 per cent stake.

Speaking with The PUNCH, the National Coordinator of the Pragmatic Shareholders Association, Mrs Bisi Bakare, stated that the billionaire businessman put his funds into the business because he saw the value proposition.

She said, “It’s a good one and you know Otedola for sure, he’s a businessman, he will never put his money where there is no prospect. I’m so sure of that. I believe that his coming over to Transcorp will also add value to the company. You can see that in the share price for now.

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“No investor will invest in a company where they will not get good returns either in terms of dividends or capital appreciation and you know with 5.52 per cent stake, he will have his representatives on the board as well. His representatives will not fold their arms. I believe his coming into Transcorp will add value to the company.”

Echoing similar sentiments, the Coordinator of the Independent Shareholders Association of Nigeria, Moses Igbrude, said, “It means that there is hope there. If there is no hope there, he will not buy.”

Igbrude also opined that Otedola was looking at playing as a major stakeholder in the power sector of the country.

 “One thing you have to know is, there are investors who want to create a monopoly. That is what I think he wants to do in the power sector and he should do it genuinely. At the last AGM of Geregu, this question was asked and his response was that power is very key and essential to the economy.

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“To him, he wants to play in that industry by providing energy to them. So I think his entry and experience of handing Geregu over the years and even declaring a dividend of N8 is going to be a positive impact,” she said.

However, Igbrude warned against a clash of interest with the current Chairman of the group, Tony Elumelu, who also has stakes in the business, directly and indirectly.

Igbrude said, “There should not be a clash of interests. He should work together with Tony Elumelu, who has been managing the company before now so that the two of them can drive the business to higher levels.”

In its notice, the group said that Otedola’s investment showed an “expression of confidence in its leadership and management as we continue our unwavering commitment to superior stakeholders’ returns, anchored in our ideology of Africapitalism.”

The 2022 financial report of Transcorp revealed that as of December 31, 2022, only UBA Nominees Limited-Trading, held five per cent or more of the issued and fully paid shares of 50 Kobo of the company.

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Also, Tony Elumelu, who is the chairman of the group directly holds 273,104,04 units of shares while

293,983,193 shares are held indirectly through HH Capital Limited and 273,545,722 shares are held indirectly through Heirs Holdings Limited.

UBA Nominees Limited has UBA Trustees Limited, Mr Emmanuel Nnorom and three others as directors and it is controlled by UBA Group, which has Elumelu as its chairman.

Transcorp Corporation has investments in power generation, hospitality and the oil and gas sectors of the economy, while Otedola is the majority shareholder in Geregu Power generation company.

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