LAGOS, Nigeria – In a surprising turn of events that has shaken Nigeria’s business landscape, billionaire Femi Otedola has made a strategic exit from Transcorp, one of the country’s largest conglomerates, amidst a fierce struggle for control with fellow billionaire, Tony Elumelu.
The battle commenced when Otedola acquired a 5.52% stake in Transcorp, immediately becoming the second-largest shareholder.
An impressive transaction quickly followed this bold move, the sale of approximately 1.5 billion units of Transcorp shares valued at N2.1 billion ($5.14 million), reportedly orchestrated between an entity owned by Otedola and an anonymous seller.
However, Elumelu didn’t back down. In a swift response, he raised his stake from 2.07% to an overwhelming 25.58% through his investment company, Heirs Holdings Ltd, thereby surpassing Otedola as the largest individual shareholder.
Sources suggest that Otedola’s initial acquisition was a calculated move that anticipated a bidding war for control of Transcorp.
In a retaliatory move, Otedola increased his stake to 6.62%, but this was insufficient to compete with Elumelu’s commanding position.
In a dramatic twist, Otedola reportedly exited his stake in the company, a decision that effectively averts a potential greenmail situation for Transcorp.
According to a top inside source who spoke with The Trent, Otedola reached a deal with Elumelu, the current chairman and majority shareholder of Transcorp, agreeing to part ways. “The negotiations were swift yet cordial, as both parties agreed it was in their mutual best interest,” an insider revealed.
Otedola’s decision is surprising, given the recent tussle with Elumelu over one of Nigeria’s biggest conglomerates. Prior to this, Otedola had been making strategic investments in Nigeria’s business sector, including acquiring a significant controlling stake in FBN Holdings.
Transcorp, a key player in the power generation, oil, and gas sectors, has been under Elumelu’s control since 2012. Under his leadership, the company has seen significant expansion, notably acquiring a power generation company.
The power struggle between Otedola and Elumelu has certainly left an indelible mark on Nigeria’s business terrain.
However, market analysts express concern over the potential impact of such a struggle on the company’s stability and growth.
An analyst who spoke to Business Insider Africa stressed, “It is crucial that the actions of both billionaires adhere to established ethical standards and regulatory requirements governing stock purchases to ensure market stability and the integrity of the business sector.”
