FBN Holdings Plc has confirmed that business magnate and investor, Mr Femi Otedola has acquired 5.07 per cent equity stake in the holding group. But in what appears not an ordinary coincidence, an existing director and chairman of First Bank of Nigeria (FBN), Mr. Tunde Hassan-Odukale increased his shareholdings to 5.36 per cent.
Company Secretary, FBN Holdings (FBNH) Plc, Mr Seye Kosoko stated that the holding group received notification of Otedola’s acquisitions on Saturday morning, after The Nation reported that Otedola had acquired more than five per cent equity stake in the holding group for First Bank of Nigeria (FBN) and its former subsidiaries.
Another document obtained by The Nation however showed that a long-standing director and chairman of First Bank of Nigeria (FBN) Limited, Mr. Tunde Hassan-Odukale, had increased his shareholding above the five per cent threshold for significant or material shareholding.
Regulatory document filed at the Corporate Affairs Commission (CAC) by FBN Holdings showed that Hassan-Odukale through direct and indirect acquisitions had acquired a total of 1.92 billion ordinary shares of 50 kobo each in FBNH, representing 5.36 per cent of the group’s issued share capital of 35.895 billion ordinary shares of 50 kobo each.
Regulatory filing at the Nigerian Exchange (NGX) yesterday showed that Otedola had acquired about 1.819 billion ordinary shares of 50 kobo each, representing 5.07 per cent of the group’s issued share capital.
According to regulatory documents, Hassan-Odukale’s shareholdings included direct personal acquisitions and indirect acquisitions through related firms including Leadway Assurance Company Limited, Haskal Holdings Limited, LAC Investments Limited, Leadway Holdings, Leadway Pensure PFA, OHO/Oye Hassan-Odukale, Leadway Properties & Investment Limited and ZPC/Leadway Assurance Prem & Inv Coll Acct.
About 95 percent of Hassan-Odukale’s shareholdings were held in four major vehicles- Leadway Assurance Company Limited, Leadway Holdings, Leadway Pensure PFA and ZPC/Leadway Assurance Prem & Inv Coll Acct.
Otedola’s acquisitions were mainly through personal holdings and indirect holdings through his nominee, Calvados Global Services Limited.
A document filed by a Marina, Lagos-based firm, APT Securities and Funds Limited, which acts as professional advisers to Otedola, at the weekend showed that the business magnate holds 10 million ordinary shares directly and 1.809 billion ordinary shares through Calvados.
Otedola’s acquisition is still subject to the approval of the Central Bank of Nigeria (CBN). Rule 4.1 of the Guidelines for Licensing and Regulation of Financial Holding Companies in Nigeria stipulates that where shares amounting to five per cent of a holding company are acquired through the secondary market, such holding company shall apply for approval from the CBN within seven days of the acquisition. FBNH is also expected to notify the CAC of changes in its shareholding.
The increase in Hassan-Odukale’s shareholdings amid Otedola’s acquisitions underscored the market interplay that saw FBNH’s share price and transactions atop activities at the stock market in recent weeks.
Market pundits were unanimous that the acquisitions by Otedola would not lead to any material changes in the board and management of the banking group. They noted that Otedola’s holding falls short of majority shareholding as the traditional alliance, which includes Hassan-Odukale, that runs the banking group still has controlling equity stakes.
With no outstanding majority shareholder, FBNH has been ran by a longstanding, time-tested traditional alliance of several shareholders with major shareholdings, who traditionally pool their holdings through proxies to sway major decisions including board and management appointments. That alliance was tested recently during a boardroom squabble and it fended off what was described as “undue” influence.
The emergence of Hassan-Odukale and Otedola’s material shareholdings has however altered the shareholding structure of the holding company, which had for several years ran without any known individual with more than five per cent equity stake.
Market pundits said the acquisitions by Otedola would possibly lead to no changes in the FBNH citing corporate governance structure at the banking group, diverse shareholding and Central Bank of Nigeria (CBN)’s regulations. As against other non-financial institutions, CBN reserves the primary approval right for any appointment to the board and management of a regulated financial institution.
“This is not like the case of Forte Oil, he was practically the owner of Forte Oil but he is not holding the majority shares in FBNH, and I don’t think he has the financial muscle to attain a clear single controlling equity stake,” a source, a dealer and chief executive at the stock market, said.