Chairman of First Holdco, Mr Femi Otedola, shook the market on Wednesday, securing a humongous off-market transaction of 10.43 billion units of the financial institution’s shares estimated at N323.4 billion.
The transaction raised his stake in First Bank or First Holdco to 36.7 percent, having acquired the shares of his major competitors and long-time shareholders, Mr Oba Otudeko and Mr Tunde Hassan-Odukale, two majority shareholders.
Mr Hassan-Odukale is a former chairman of First Bank of Nigeria. Mr Otudeko, who was First Bank’s chairman for 24 years before his removal by the CBN in 2021, owned 8.65 percent stake, excluding the 7.4 percent and 4.7 percent shareholding under litigation.
He had been at loggerheads with Mr Otudeko over who owns what in First Holdco. He had joined the Central Bank of Nigeria (CBN) in a court case over an alleged deliberate reduction of his stake in First Holdco.
READ ALSO: 10 things to know about First Bank ownership tussle
Mr Otedola’s shares were acquired at N31 per share in 17 deals on Wednesday, reliable market sources told Economy Post. They were sold to a company known as RC Investment Management Limited linked to Mr Babatunde Samuel Sule. In other words, it was Mr Sule who bought these shares from Mr Otudeko and Mr Hassan-Odukale.
With the transaction, the seemingly intractable tussle between Mr Otedola and Mr Otudeko appears to have been over and soldifies the former’s position in First Holdco. In fact, reliable sources said the transaction was initiated by the Central Bank of Nigeria (CBN) to resolve the long-running battle between Mr Otedola and Mr Otudeko, which has hampered the First Bank’s capacity to raise capital. First Bank is yet to raise capital as the CBN’s bank recapitalisation deadline draws close.
Information on the Nigerian Exchange Group shows that the deal was brokered by First Securities Ltd, a firm within the FirstHoldCo group. A number of firms were involved in the sell side of the transaction, including First Securities, CardinalStone Securities, Meristem Stockbrokers, Renaissance Capital, Regency Asset Management, United Capital Securities, and Stanbic IBTC Stockbrokers.
Sources linked the transaction to the recent exit of Barbican Capital from the First Holdco’s shareholding structure, fuelled by “a gentleman’s agreement following a deal reached between Otudeko in recent weeks.”
Otedola vs Otudeko
In August 2024, Economy Post had reported a raging fight at First Bank of Nigeria over who owned the largest share. The tussle was between Mr Otedola, and Mr Otudeko who owns Barbican Capital, which is affiliated to Honeywell, an Apapa, Lagos-based flour miller. Oba Otudeko is the founder and chairman of Honeywell Group.
READ ALSO: Ex-First Bank manager accuses Otudeko of granting loans to firms linked to him
The contention was about who owned the largest share in First Holdco. Barbican Capital, owned by Otudeko, had claimed that it was the largest shareholder with 15.01 percent stake in First Holdco, alleging that Otedola owned only a 9.41 percent share. Barbican Capital claimed that its 5.38 billion units of shares in the bank had been altered by Nigeria’s oldest bank. First Holdco, however, disagreed, arguing that Barbican could not provide evidence of some of the shares it claimed to own.
First Holdco further argued that Barbican was concealing the fact of a verification exercise by the Central Bank of Nigeria (CBN) regarding its alleged significant shareholdings. It noted that only 3.110 billion shares (representing 8.67 percent of Barbican’s total shares) of Barbican Capital’s total shares could be verified by the CBN, while its alleged 2.34 billion shares (representing 6.52 percent) could not be verified.
First Holdco had also claimed that Barbican Capital did not challenge the outcome of the verification exercise carried out by the CBN as the supervisory and regulatory body regarding share ownership. However, Barbican claimed that it had attached a statement by the Central Securities Clearing System Plc (CSCS), which is a computerised depository, clearing, settlement, and delivery system for transactions in securities. Barbican noted that CSCS’s statement showed that as at May 23, 2024, its shareholding stood at 5.386 billion shares.
Barbican went to court to seek clarification.
A report had said, “The Central Bank of Nigeria (CBN), and FBN Holdings Plc have asked a Federal High Court sitting in Lagos to dismiss a suit filed by an investment firm, Barbican Capital Ltd, over the alleged alteration of its alleged 5,386,397,202 units of shares in the bank.” This implies that the apex bank is tilting towards the current ownership of First Bank.”
Barbican also claimed that First Bank wrote to the registrars, Meristem Registrars & Probate Services Ltd, who paid dividends to shareholders, to freeze its dividend payments on the disputed shares.
But First Holdco claimed that the Central Bank of Nigeria Guidelines for Licensing and Regulation of Financial Holding Companies (FHC) in Nigeria (issued pursuant to the Central Bank Act of 2007 and Banking and Other Financial Institutions Act 2004) required prior approval to be sought from CBN before the purchase of a FHC’s shareholding of five percent and above, or, in the event that the share units were purchased on the secondary market, to notify the CBN within seven days from the date of the purchase to obtain a ‘no objection’ or approval from the CBN.
READ ALSO: First Bank clarifies misleading reports, reassures customers of gold standard banking services
However, it appears that the matter will now die a natural death. But a number of Nigerians are wondering who Mr Babatunde Sule is.
