Business
Femi Otedola exits stake in Transcorp Plc in landmark deal
Nigerian billionaire Femi Otedola has sold his stake in Transcorp to fellow billionaire Tony Elumelu and chairman of the company. The move comes days after reports surfaced about a power struggle between the two moguls for control of Transcorp.
The media has been abuzz with the high-stakes investment, with many suggesting a potential rift between Otedola and Elumelu. This speculation prompted Elumelu to grant a rare media interview, during which he referred to Otedola as his brother.
Otedola also responded to the interview by posting it on his Instagram page, suggesting that despite their differences over Transcorp, the two billionaires may still be on good terms. New Twist However, on Friday, April 28, 2023, Billionaires Africa reported that Otedola had negotiated a deal with Elumelu, brokered by prominent mutual friends of the two tycoons.
Though the friends’ names were not disclosed, sources suggest that it could be Aliko Dangote, who is regarded as a mentor to Nigerian billionaires. The deal entailed Otedola selling his newly acquired 6.08 percent stake and completely exiting the company. The reported added that Elumelu paid Otedola a 400-percent premium on Transcorp’s closing price on Thursday to acquire his bloc of shares.
Based on calculations, Otedola earlier bought 2.6 billion shares or 6.3 percent of the company shares, is likely to receive approximately N12.5 ($0.027) per share, resulting in a total payout of N32.5 billion ($70 million) after selling his stake in the company.
According to Nairametrics, both billionaires started negotiating the deal on Thursday and agreed to part ways.
Elumelu is now undisputed number one in Transcorp after he increased his shareholding in Transcorp to 10.26 billion shares from 840.63 million shares before Otedola showed interest in the company, likely in anticipation of potential conflicts.
With Otedola’s exit, Elumelu can now focus on implementing his growth strategy for Transcorp without any distractions.
Elumelu had earlier shared his plans to list Transcorp Power in five years, provided there is a significant improvement in transmission lines and gas supply to the power sector.
A potential spin-off of Transcorp Power is viewed as a means to extract value from the company, given that the power business accounts for 86% of the group’s profits.
