Nigerian billionaire investor, Femi Otedola, has revealed details of why he acquired about 6% shares in Transcorp and decided to sell shortly after.
Recall that just last month, Otedola disposed of the 6% shares he owned in Transcorp to Heirs Holding Ltd after both of them seemed to have publicly displayed affection for each other and agreed to work together.
Otedola initially acquired a 5.52% stake in the company back in March, making him the second largest shareholder of the company. The announcement of the acquisition immediately triggered a scramble for the shares of the company as investors sensed a buying opportunity. The share price more than doubled within a matter of weeks.
But as Otedola increased his stake to just over 6%, Tony Elumelu via his special purpose vehicle, Heirs Holdings, also upped his stake taking his ownership of the conglomerate to about 25.5%.
In a press release seen by Daily Trust, Mr Otedola and Mr Elumelu’s Transcorp affair, dates back to about 16 years ago when the former was the chairman of the company and Elumelu was the MD/CEO of Standard Trust Bank.
Otedola 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 N2 billion 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 5% 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.
“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.”
Daily Trust understands a statement from Elumelu may be released soon, addressing the comments from Otedola.