Billionaire investor Femi Otedola has increased his stake in FirstHoldCo Plc, the parent company of Nigeria’s oldest bank, First Bank, to a commanding 40 per cent. This consolidation of power was achieved through an off-market block trade on the Nigerian Exchange Limited (NGX) on Wednesday, valued at N324.47 billion for 10.47 billion units of shares.
The move, which saw Otedola buy out the substantial holdings of former Chairman Oba Otudeko, is widely seen by analysts as the crucial first step towards bringing stability to the banking giant.
The mega deal cements Otedola’s control over a pivotal institution in Nigeria’s financial sector, an entity that, despite its venerable history, has often been perceived as operating below its full potential due to persistent shareholder infighting. The transaction effectively sidelines Oba Otudeko, the erstwhile Chairman of FirstHoldCo, who was reportedly compelled to divest over 20 per cent of his linked shares.
This sale comes amidst reports of legal and regulatory pressures, with the bank’s management, now influenced by Otedola, having pursued criminal complaints against Otudeko in the Federal High, Lagos, even following previous commercial settlements. With these share transactions, it is anticipated that First Bank will withdraw its criminal complaint, allowing the 82-year-old Otudeko to exit with over N300 billion in cash.
Further streamlining the shareholder base, another long-term investor, The Hassan-Odukales, voluntarily exited the bank, selling off five per cent of their holdings in this extensive transaction, reportedly seeking better shareholder value elsewhere.
“These acquisitions by Otedola, analysts believe, are the first step to bringing stability to the troubled bank after years of shareholder infighting,” reads an internal assessment, The off-market deal was executed at a fixed price of N31.00 per share on the NGX. This contrasted with the bank’s public trading, where FirstHoldCo Plc stock gained 9.9 per cent on Wednesday to close at N32.2 per share, indicating the premium paid in the negotiated deal.
The market has responded robustly to Otedola’s growing influence. FirstHoldCo Plc stock was seen rising 192 per cent since the billionaire activist investor initially unveiled his major stake in the company in October 2021, when he first became the firm’s single largest shareholder with a 5.07 per cent equity stake. At that time, the lender’s market price was trading near N11 per share with a market capitalisation of N393.35 billion. The recent share price performance underscores investor confidence in Otedola’s strategic vision for the bank.
According to reports, the transactions were negotiated deals, meaning they were arranged privately between parties and subsequently reported to the Exchange, rather than occurring through conventional daily buy/sell orders.
Findings from the NGX indicate that 17 separate deals took place, with First Securities Ltd acting as the primary buyer. The sellers included a consortium of prominent stockbroking firms such as CardinalStone Securities Ltd, Meristem Stockbrokers Ltd, Renaissance Capital (Rencap) Securities Ltd, Regency Asset Management Ltd, United Capital Securities Ltd, and Stanbic IBTC Stockbrokers Ltd. Interestingly, First Securities Ltd also reportedly acted as a seller in some transactions, suggesting potential portfolio reshuffling or inter-account transfers within associated entities.
The timing of Otedola’s increased stake follows a period of strategic activity for FirstHoldCo Plc. Earlier this year, the company successfully concluded the first phase of a N150 billion rights issue, which attracted subscriptions totaling N187.6 billion,exceeding the target by over 25 per cent. This strong subscription rate indicated a foundational level of investor confidence and provided fresh capital for the bank’s operations, a testament to the underlying potential Otedola is now poised to fully leverage.
For the Nigerian financial sector, Otedola’s consolidated control over FirstHoldCo Plc signals a potential new era of strategic direction and stability for one of the nation’s most iconic banking brands.
Analysts will be keenly watching how this newfound control translates into operational efficiencies, enhanced profitability, and a more streamlined governance structure, ultimately impacting the bank’s competitive standing and its contribution to Nigeria’s economic development.
