Nigeria's business landscape has been rocked by a fierce battle for control of Transcorp, one of the country's largest conglomerates, between two of its most prominent billionaires, Femi Otedola and Tony Elumelu.
This fight for dominance began when Otedola acquired a 5.52% stake in Transcorp, making him the second-largest shareholder in the company. The move was followed by a significant transaction involving the sale of approximately 1.5 billion units of Transcorp shares valued at N2.1 billion ($5.14 million), reportedly consummated between an entity owned by Otedola and an unnamed seller.
Not one to back down, Elumelu responded by raising his stake in the company from 2.07% to 25.58%, thereby surpassing Otedola as the largest individual shareholder in the company. He did this through his investment company, Heirs Holdings Ltd, and sources suggest that Otedola's move to acquire a 5.52% stake in the company was a prelude to another bidding war for control of Transcorp. In response to Elumelu's actions, Otedola reportedly acquired an additional 1.12% stake in Transcorp, bringing his total stake in the company to 6.62%. However, this move was not enough to counter Elumelu's significant shareholding.
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The battle for control of Transcorp took a dramatic turn when Femi Otedola reportedly exited his stake in the company. According to Nairametrics, Otedola reached a deal with Elumelu, the current chairman and majority shareholder of Transcorp, to exit the company. The decision effectively staves off a possible greenmail situation for Transcorp, which could have turned out murky.
The negotiations leading to the agreement were said to be swift yet cordial, as both parties opined it was in their mutual best interest to part ways. This turn of events is surprising, given the recent battle between Otedola and Elumelu for control of one of Nigeria's biggest conglomerates.
Otedola had been making strategic investments in Nigeria's business sector, with the Transcorp acquisition coming shortly after he acquired a significant controlling stake in FBN Holdings. Transcorp, which is primarily involved in the power generation, oil, and gas sectors of the economy, has been under Elumelu's control since 2012. The company has expanded significantly under his leadership, with a notable achievement being the acquisition of a power generation company.
The tussle for control of Transcorp between Femi Otedola and Tony Elumelu is a significant development in Nigeria's business landscape. However, market analysts have raised concerns about the impact of the power struggle on the company's stability and growth potential. “It is important 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,” one analyst told Business Insider Africa.