Billionaire Femi Otedola exposes Tony Elumelu following Transcorp Takover fallout
- Posted on May 09, 2023
- Editors Pick
- By STEPHEN ADEBAYO
Billionaire investor Femi Otedola and business mogul has shared new information that sheds light on why he acquired a 6% stake in Transcorp, and why he sold it shortly after. According to a press release, Otedola's involvement with Transcorp dates back to 16 years ago when he was the company's chairman and Tony Elumelu was the MD/CEO of Standard Trust Bank. In April of this year, Otedola sold his 6% stake in Transcorp to Heirs Holding Ltd, despite the public display of affection between him and Elumelu, and their agreement to work together.
In March, Otedola acquired a 5.52% interest in the company, which made him the second-largest shareholder. The announcement of his acquisition triggered a frenzy among investors who saw an opportunity to purchase shares. Within a few weeks, the share price more than doubled. Otedola later increased his stake to just over 6%, but Tony Elumelu also raised his stake through his special purpose vehicle, Heirs Holdings. This move increased Elumelu's ownership of the conglomerate to approximately 25.5%.
Mr. Otedola's Statement In Its Entirety Is Provided Below
“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.”
“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 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 $ 300 million.”
“And as some would say: the rest is history.”
“Fast forward to the present…”
“I offered to buy Transcorp Plc for N250 billion, but unfortunately, my offer was rejected. My goal was to maximize 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.”
“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.”
“My message to Transcorp Plc and its shareholders is this: 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. Thank you for the opportunity to engage in this exciting chapter of Transcorp’s history.” Femi Otedola
An Attempt To Dissect And Explain The Statement
During the transactions, Otedola and Tony Elumelu, the Chairman of Heirs Holdings, publicly professed their affection for each other, declaring that they were good friends. However, Otedola's recent statement hints at a deeper motivation. According to reliable sources, the two men never spoke to each other directly and used intermediaries to communicate throughout the transaction. This is not unusual for billionaires involved in business deals.
According to sources, Mr. Otedola has made allegations against Tony Elumelu, claiming that Elumelu used his shares in UBA and Africa Finance Corporation as collateral to pay off his debts when he went bankrupt in Nigeria. Otedola also alleges that Elumelu covertly purchased shares in Transcorp Hotel and outbid him for the Ughelli Power Plant after he had expressed his interest in it to Elumelu. It's important to note that Otedola has not made any direct accusations against Transcorp Plc or its shareholders.
It is understood that Tony Elumelu may soon release a statement in response to the remarks made by Mr. Otedola.
Read More about the Femi Otedola-Transcorp Saga here:
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