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Otedola says ‘looking forward’ to working with Transcorp board and management

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Key Highlights

  • Femi Otedola confirmed the acquisition of 5.52% ownership of Transcorp Plc
  • Transnational Corporation Plc also recently confirmed the acquisition by Otedola.
  • The entry of Mr. Otedola into Transcorp has paved the way for the return of the bulls helping the stock to gain 75%.

Nigerian business mogul and billionaire, Femi Otedola has said that he is looking forward to working with the board and management of Transcorp to realize the amazing future potential of the corporation.

Otedola stated this while confirming the acquisition of a 5.52% stake in Transcorp Plc on his Instagram page seen by Nairametrics. Nairametrics first reported the 5.52% ownership in an exclusive article published on the 12th of April 2023.

The recent acquisition makes the billionaire businessman the second largest shareholder of the company. The first largest shareholder remains UB A Nominees holding a 9.26% stake in the company.

“Following this acquisition, I look forward to working with the board and management of Transcorp to realise the amazing future potential of the corporation,” he said. 

Transnational Corporation Plc recently confirmed that Otedola has acquired about 2.245 billion shares of the company.

In a press statement signed by Funmi Olofintuyi, Company Secretary (Ag.) and issued on the Nigerian Exchange as is statutorily required, Transcorp noted that in compliance with Chapter 17, Rule 17.13 of the NGX Issuers Rules, Transnational Corporation Plc announced to the Nigerian Exchange Limited (NGX) and the investing public that Otedola acquired the shares which represent 5.52%.

  • “As noted in our previous communication, the Company welcomes this expression of confidence in its leadership and management as we continue our unwavering commitment to superior stakeholders’ returns, anchored in our ideology of Africapitalism. Rest assured of our commitment to remain resolute in executing our Group’s strategy of making strategic investments in key sectors within the Nigerian economy, our transformation agenda, and our ability to contribute positively towards building prosperity for all,” the statement noted.

What this means? The response brings full circle the mutual confirmation of the acquisition of 5.52% ownership by Mr. Otedola.

Sources with knowledge of the transaction opine management of Transcorp and Mr. Otedola have already started exploring mutual areas of interest for the company. Sources close to Mr. Otedola indicate he sees value in Transcorp and is favourably disposed to combining forces to expedite its growth. Sources in Transcorp also suggest they are unperturbed by the acquisition explaining why their press release was cordial.

Unlike the FBN Holding acquisition which resulted in a shareholder jostle for control, analysts who spoke to Nairametrics suggest this may not be the case with Transcorp, considering the vast influence and interest of Mr. Elumelu and Mr. Otedola in the Nigerian economy. This perhaps also explains the cool handling of the acquisition by both parties.

However, there are also suggestions that there might yet be a race for even larger significant control of the company by both parties which could further impact the share price.

Bulls after Transcorp: Since the acquisition was reported by Nairametrics, the shares of the company have gone from N1.4 to N2.45 per share gaining a whopping 75% return in just under a week.

The stock continues to dominate in volumes and price increases as investors envisage a jostle between two of Nigeria’s most influential businessmen. Nairametrics estimates about 1.2 billion in Transcorp shares has crossed this week as investors continue to assign higher multiples to its earnings in the wake of the acquisition.

Transcorp Results: Transcorp has released its financial results for the full year that ended December 31, 2022, demonstrating significant improvements in its major income lines.

  • Its profit after tax for the group fell from N28.3 billion to N16.8 billion.
  • However, the company posted a profit of N7.2 billion higher than the N3.2 billion posted a year earlier.
  • Transcorp also released its first quarter results ahead of schedule showing group profits before tax fell 50.8% to about N2.8 billion. HoldCo profits also declined to N350 million from N1.24 billion.