After billionaire businessman Femi Otedola acquired a 5.52 percent stake to become the second largest shareholder in Transcorp and sold out the shares to Tony Elumelu, the chairman of the group, people wondered why and what went wrong.
Weeks after, Femi Otedola in a press statement to The cable spoke about the events that led up to his decision, his relationship with Tony Elumelu and he also revealed this offer to buy Nigerian conglomerate of Transcorp Corporation Plc, for N250bn was rejected.
The billionaire while going back down memories lane with The cable, divulged some business dealings with another billionaire Tony Elumelu.
He said, “In 2005, while Tony was the Managing Director of Standard Trust Bank, he approached me to get funds to acquire UBA. I enthusiastically gave him $20 million, which was N2billion at that time to buy the necessary shares in UBA for the acquisition. After a short period of time, the share price moved up and I decided it was a good moment to sell and get out of the bank. However, Tony appealed to me to hold on to the shares as he was convinced that there were future prospects – so I kept the shares.
I became Chairman of Transcorp Hotel in 2007 with a shareholding of five per cent and unknowingly, Tony gradually started buying shares quietly. By the following year in 2008, I went bankrupt in Nigeria. Tony proceeded to take my shares in UBA to service the interest on my loans and he also took over my shares in Africa Finance Corporation, where I was the largest shareholder”
Still down memory lane, he added that,
“ shortly after, Albert Okumagba informed me that an American firm wanted to acquire my shares in Transcorp, which I then agreed to sell. However, this supposed American firm turned out to be Tony Elumelu. The revelation of this prompted me to resign as Chairman of the hotel. Years later in 2012, Tony said he wanted to see me, so we met in my office where I had previously had a meeting with foreign investors who had not yet departed the premises. Curious to know, he asked what sort of meeting I had and I disclosed that I wanted to go into the power business, specifically Ughelli Power Plant. Tony quietly went ahead to bid for Ughelli and he outbid me by offering to buy the plant for $300million.”
Tony Elumelu before Otedola’s statement had said he welcomed Otedola’s investment in the company and looked forward to working with him adding that they are both good friends and he only follows Femi Otedola and his wife on Instagram.
“Fast forward to the present…
Otedola said, “I offered to buy Transcorp Plc for N250 billion, but unfortunately, my offer was rejected. My goal was to maximise the company’s potential as a Nigerian conglomerate with a market cap of at least N2 trillion instead of the current N40 billion, but it seems some shareholders have a different vision”
He went on to say that “As a businessman, I believe in healthy competition and market dynamics. Two captains cannot man a ship, and I respect the majority shareholder’s decision to buy me out. This is the nature of the game.”
“But let me be clear, my offer was made with the best intentions for Transcorp Plc and its shareholders. I saw an opportunity to unlock the company’s full potential and create value for everyone involved.
It’s important for investors to understand that free entry and free exit are crucial to healthy markets. The scramble for shares after my acquisition is a testament to the value that Transcorp Plc can offer, and I hope the company continues to thrive under new leadership.
However, he voiced his displeasure at how stakeholders in Nigerian companies were getting shortchanged by the owners and managers.
“I remain committed to the growth and success of Nigerian businesses, and I will always be looking for ways to create value for all stakeholders. Stakeholders are unfortunately always shortchanged by getting stipends while the owners and managers of the business live a jet-set lifestyle, which is detrimental to the stakeholders.”