BY KENNETH EZE
Money and capital market stakeholders are still reacting differently to the reported purchase of majority equities in FBN Holdings, owners of the First Bank franchise in Nigeria, by popular billionaire businessman, Femi Otedola.
A stockbroker with Peak Capital, Waed Sanny, welcomed the development. He described it as a signal to the end of the feud that had been threatening the foremost lender for some time now.
He said, “The squabble at the Board of FBN Holdings has impacted negatively on the systemic bank and blurred its outlook. This development opens a vista that can lay that ghost to rest. I just hope that they handle it properly.”
A shareholder at the bank, Ibiyemi Oke, told The Point, that it can only be “a wait and see situation. These men are capitalists, known for their selfishness. I can only say, ‘let’s see how it goes’.”
Oke who claimed to be a longstanding shareholder of FBN Holdings expressed surprise that the former chairman of the Board, Oba Otudeko, could be reprimanded for breaching corporate governance standards while leading the board.
“I used to admire his roles at the boards of the various companies where he sat and chaired over the years. I never thought he could be successfully questioned and removed by the Central Bank of Nigeria. But it has happened, and no one is sure what the new majority shareholder has up his sleeves,” he added.
Initially, First Bank of Nigeria Limited, in a statement signed by its Company Secretary, Seyi Kosoko, and filed with the Nigerian Exchange Limited on Friday, said it had not received any notification of such acquisitions.
It said, “The attention of FBN Holdings Plc has been drawn to media reports today (Friday) that a certain individual has acquired significant shareholding interest in FBN Holdings Plc.
“As a listed company, the shares of FBN Holdings are publicly traded, and sale and acquisition of shares is expected in the normal course of business. We operate in a regulated environment, which requires notification of significant shareholding by shareholders to the company, where shares are held in different vehicles, further to which the company will notify the regulators and the public as appropriate.
“The company is yet to receive any notification from the individual mentioned in the media report, of such acquisitions.”
But in another twist of event, First Bank, made another dramatic U-turn on Saturday on the alleged takeover of its bank by Otedola.
It announced that Otedola, has acquired substantial shareholding in the company.
“With this development, Otedola, is said to be plotting a takeover of the lender following the ouster of Otudeko in April, and this has handed the bank’s investors N163.32 billion”
FBN Holdings made the announcement in a statement issued on the Nigerian Exchange Limited’s portal.
A fresh statement, signed by Kosoko said, “We refer to our communication to the market dated, October 22, 2021 on the above subject wherein we stated that we would inform the public of any substantial acquisition, upon receipt of notification from the shareholder.
“This morning, October 23, 2021, FBN Holdings Plc received a notification from APT Securities and Funds Limited, that their client, Mr. Otedola Olufemi Peter, and his nominee, Calvados Global Services Limited, have acquired a total of 1,818,551,625 units of shares from the company’s issued share capital of 35,895,292,791.
“Based on the foregoing, the equity stake of Mr. Otedola Olufemi Peter and his nominee in the company is now 5.07 per cent.”
With this development, Otedola, is said to be plotting a takeover of the lender following the ouster of Otudeko in April, and this has handed the bank’s investors N163.32 billion.
The report of Otedola mopping First Bank shares off the Nigerian stock exchange floor came days after it was reported that the financial institution’s stock value rose by 57.7 percent in the opening two weeks of October.
The share appreciation is allegedly linked to Otedola’s presence in the capital market, as he purchases stocks from First Bank’s 34.7 billion shares floating freely at the Nigerian bourse, to take up a 5 percent control.
Before Otudeko was sacked by the Central Bank of Nigeria for bad practices, according to Godwin Emefiele, he owned a total of 537.9 million shares (5.89 million direct shares and 532.07 million indirect shares).
Otudeko also served as chairman, but was replaced with Remi Babalola (who owns 302,417 shares; indirect 195,468 and direct 106,949) temporarily, and this position will soon be snapped up by Otedola.
Currently, there isn’t any individual shareholder with 5 percent or more according to an unconfirmed report, but Otedola is now holding 5 percent or more through its investment vehicles, one of them being Calvados Global Services Ltd.
First Bank hasn’t reported these multiple transactions linked to Otedola, but companies are mandated to disclose the deals of individuals with substantial shareholding.
Otedola’s influence rose in the last 10 months, and his presence had to do more good in the three weeks of October, as First Bank’s market value rose by 50.3 percent.
When compared to the period between January and September 28, the company’s stock value had been sluggish, trading between N7.15 kobo and N7.55 kobo, rising by 12.5 percent in nine months, but rose to N12.1 kobo in October, from N8.05 by September 29.
The appreciation in stock value earned First Bank shareholders N163.32 billion in three weeks, as total stakeholders’ investment rose to N434.33 billion, up from the N271 billions on September 28.
The presence of Otedola may signify a positive future for the firm, reason for investors renewing their interest in First Bank, while other existing investors held on to their shares, as the Nigerian billionaire is known for turning around companies, a feat he achieved with African Petroleum and Geregu Power Plant.
The Point reports that FBNH currently has 34.7 billion of its shares floating freely, which implies that they are held by diverse shareholders. The situation makes the shares easy to acquire at the trading floor of the Nigerian Exchange.
The audited financial statements of the bank for the year ended December 31, 2020 does not show any single shareholder with up to 5 per cent of the ownership of the banking behemoth.
The Point also gathered that the billionaire investor, decided to take over the bank because of the internal crisis it has been going through of late.
Recall that the battle for the control of Nigeria’s oldest lender, among two power blocs dominated by key shareholders with interests in its ownership, was at the heart of the recent shake-up of the bank’s board, earlier in the year.
This culminated in the CBN dismissing the Boards of the Holdco and banking franchise on April 29, 2021 in a dramatic move that came a day after the bank flouted the regulator’s directive over appointment and removal of a new managing director.
The regulator reinstated as the managing director of the bank, Adesola Adeduntan, whom the Board attempted removing in an ultra vires manner.
The regulator said First Bank, which has over 31 million customers with a deposit base of N4.2 trillion, shareholders’ funds of N618 billion, has for years been plagued by “bad credit decisions, significant and non-performing insider loans and poor corporate governance practices.”
It was reported that the bank was exposed to Honeywell Flourmills, the former chairman’s company, beyond the single obligor limit, a situation that brought the bank’s corporate governance and risk management standards under scrutiny.
