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Nigerian billionaire Femi Otedola has reduced his shareholding in First Bank of Nigeria Holdings Limited (FBN Holdings) by selling 664 million shares in the leading lender for N7.4 billion ($17.8 million).
Otedola, who helped Forte Oil (now Ardova Plc) become a dominant player in Nigeria’s downstream oil industry before selling his stake to Prudent Energy in 2019, acquired a significant 7.57-percent stake in FBN Holdings in October 2021, making him the largest shareholder in the leading financial services group.
According to a flurry of trading updates published on the Nigerian Stock Exchange on Tuesday, the Nigerian businessman sold a total of 664,939,764 shares in four separate transactions on the trading floor on June 6 at an average price of N11.12 ($0.0268).
The market value of the 664,939,764 shares sold was N7.4 billion ($17.8 million). Following the transaction, Otedola’s stake in FBN Holdings decreased from 2,717,282,140 shares, or 7.57 percent, to 2,052,342,376 shares, or 5.72 percent.
Despite the recent transaction, Otedola remains the largest shareholder in the tier-one bank, ahead of Tunde Hassan-Odukale, managing director and CEO of Leadway Assurance Company, who owns a 5.32-percent stake in the lender.
Because the shares were sold before the bank’s dividend qualification date of June 16, the transaction is expected to have an impact on his dividend earnings in the lender, and he is expected to pocket N718.3 million ($1.73 million) on June 21, down from the N951.05 million ($2.29 million) previously reported.
FBN Holdings is one of Nigeria’s largest financial services conglomerates. It is the non-operating holding company for First Bank of Nigeria Limited, the country’s oldest commercial bank, with active operations in 10 countries.
Its full-year profit in 2021 dropped by 99.9 percent from N75.6 billion ($182 million) in 2020 to N151.1 billion ($363.7 million) thanks to strong performance from its banking, operations, pension, and investment banking sectors, which increased the group’s gross earnings by 28.2 percent to N757.3 billion ($1.82 billion).
Experts believe that the sale may have an impact on the bank’s valuation, which recently surpassed $1 billion for the first time since 2018.
Shares in the financial services group were trading at N10.9 ($0.0262) per share as of press time on June 8, 3.11-percent lower than its opening price on the local bourse on Tues., June 8.
According to its current valuation, the bank’s market capitalization is N391 billion ($942 million), while Otedola’s 5.72-percent stake is valued at N22.37 billion ($53.9 million).
