Home » Nigerian billionaires fight to control one of country’s largest banks

Nigerian billionaires fight to control one of country’s largest banks

by Omokolade Ajayi

Nigerian billionaire Femi Otedola’s acquisition of a substantial stake in Nigeria’s oldest banking group, First Bank of Nigeria Holdings Plc (FBNH), has spurred a battle among billionaires in the country, as they put their hard-earned money to work to control the Lagos-based lender.

A recent news report that Otedola had become one of the largest shareholders in FBNH after finalizing the acquisition of a 5.01-percent stake worth N22.27 billion ($54.2 million) in the holding sent shockwaves through the Nigerian banking space.

In a letter to the FBNH chairman, the billionaire explained that efforts are still under way to consolidate shares held through other indirect and nominee accounts, which will be made public soon.

He added that he has made an additional $30-million investment in the bank’s long-term debt instrument, which constitutes a significant portion of the bank’s capital base. 

In reaction, through its general counsel, the FBNH management said that it received a notification from Leadway Assurance that First Bank of Nigeria Limited Chairman Tunde Hassan-Odukale and related parties had acquired a total of 1,923,512,099 shares, representing a 5.36-percent stake.

As the battle to control the group revs up with wealthy Nigerians declaring their shareholdings in the enterprise, information from capital market observers revealed that Africa’s fifth wealthiest man, telecom mogul Mike Adenuga, has also been acquiring additional shares in the group.

Nigerian banking experts with insider information about the ownership stakes of these wealthy individuals in the holding, revealed that Nigerian multimillionaire Obafoluke Otudeko and Adenuga both hold substantial stakes in the banking group, amounting to over five percent.

The information contradicts earlier statements by the holding’s management that no one person holds a five-percent ownership stake or more in the Lagos-based lender. It also intensifies debates as to who its next chairman and directors will be, as the billionaires put their money to work.

Former Guinness Nigeria Plc Non-Executive Director and Financial Derivatives Limited Managing Director Bismarck Rewane noted that regulators will still vet Otedola’s acquisition of the stake in the group, explaining that the Central Bank conducts due diligence into its potential shareholders.

Otedola’s acquisition has triggered a frenzied atmosphere in the Nigerian banking and equity market sector, as experts expect to see more acquisitions from other substantial shareholders.

Although Otedola may emerge eventually with the highest stake in the group, Rewane stated that the billionaire will have to rely on shareholder recommendations at the annual general meeting to emerge as a director or the chairman of the leading Nigerian banking holding.

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