Mercurial billionaire businessman, Femi Otedola, has yet again struck gold by waving his magic wand. Known for his uncanny ability to always know the right moment to strike, the Epe-Lagos born billionaire, from the start of 2023, made a big bet on making a big kill on Dangote Cement shares and quietly went to work mopping up shares of the blue chip company without blowing the trumpet, NIYI JACOBS writes
Businessman, Femi Otedola Otedola has made another big score to further entrench himself as Nigeria’s undisputed number one investment guru.
By that singular master stroke, Otedola found his way back on the Forbes richest list of African billionaires, which he exited in 2017, when his once prospering oil firm, Forte Oil, unravelled after the Federal Government fully liberalized the diesel market.
Not only that, he equally helped his long-term buddy, Alhaji Aliko Dangote, to rejoin the 100 richest people in the world list with a new total net worth of $22 billion, up from the $15.1billion figure he had achieved in December 2023.
Sources close to Otedola told BUSINESSNG that after the public announcement of the commencement of operations at the $20billion Dangote Refinery and Petrochemicals plant in Lekki, Lagos, he instructed his brokers to start buying the shares of Dangote Cement on offer.
According to one of the close associates, when queried on the sudden interest in acquiring Dangote Cement shares, he (Otedola) replied by singing late Micheal Jackson’s famous song, ‘Wanna Be Startin’ Somethin’.
“He told us to watch out for what’s going to happen when news breaks that he is mopping up Dangote Cement shares in the market”, a source familiar with the acquisition informed our correspondent.
True to Otedola’s words, the already bullish run on Dangote Cement stocks was accentuated after news broke on January 19 that the Geregu Power Plant owner had acquired an undisclosed, but very large amount of shares in Dangote Cement.
The announcement caused a buying frenzy among investors, who scrambled to snatch up any Dangote Cement shares they can lay their hands on.
Expectedly, the mad rush by investors hoping to cash in on the bazaar pushed up the price of Dangote Cement stocks to one of their highest level ever, with a share settling at N694.10 on the Nigerian Exchange (NGX) on the last trading day of the week, Friday, January 26, 2023.
This is an appreciation of N319.01, a little more than 90% in just 16 days, from the N375.00 it traded on January 15, 2024.
Apart from making money for Dangote, Otedola also pocketed a princely sum of about $250million from his Dangote Cement stocks dealings as at January 15, 2023, pushing his verified net worth to $1.25billion.
His met worth would grow further in the last 11 days since Forbes announcement, as his 90% shares in Geregu Power plant, as well as his newly purchased Dangote Cement stocks have continued to appreciate.
Geregu Power Plc is currently the ninth most valuable stock on the NGX with a market capitalization of NGN 1.24 trillion, which is about 2.21% of the Nigerian Stock Exchange equity market at the end of trading on Friday, January 26.
“If Forbes had put his total net worth at $1.25billion as at January 15 when Geregu Power capitalization hit the N1trillion mark, what it means is that his stocks in Dangote Cement account for the remaining $250million.
“Since Dangote Cement total stocks have appreciated about 91% in the last one week, it means Otedola’s Dangote’s stocks would have gained another $250million, pushing his gains to about $500million”, a capital market source informed our correspondent.
Another expert in the nation’s financial sector, who did not want his identity revealed, said rather than being an attempt to forcefully take Dangote Cement from Aliko Dangote in a hostile manner being bandied about in some quarters, the reverse is the case.
“There is no way Otedola will attempt a corporate takeover of Dangote Cement Plc. Aliko Dangote and Dangote Industries Limited own over 80% of the cement company.
“So, it was just billionaires banter, and playing games that is happening. I guess Otedola just assisted Aliko Dangote to get back his position as the richest man in Africa.
“And in the process of helping his friend, he also feathered his own nest. To me, this is a win-win situation for both parties”, clarified another source.
In his own remarks, Segun Olaniyi, a stock brother based in Lagos described Otedola as the master of the game.
He actually betted on Dangote Cement stocks and seems to have gotten away with it. I won’t be surprised tomorrow if I hear that he has again cashed out by selling his newly bought Dangote Cement shares after making several millions of dollars from the transaction.
“People are actually right if they describe him as a fortune teller, who has the uncanny ability to predict the future, because he has always gotten his moves right”, a stockbroking expert said about him.
Also speaking on the development, the President/Chief Executive of Dangote Industries Limited, Aliko Dangote, said that Otedola, is welcome to attempt a corporate takeover of Dangote Cement.
While speaking at the Dangote Cement customers appreciation event in Lagos attended by Otedola, Dangote said: “We must also welcome our newest shareholder, Femi Otedola.
“There are people, who fear that he is going to do the same thing he did at Transcorp; I say he’s welcome”.
Femi, the son of the former Lagos State governor, Sir Micheal Otedola, is not new to intriguing boardroom and financial chess games.
Of all Otedola’s business interventions, there is none that scored a greater bulls eye than his emergence as the biggest single shareholder of Nigeria’s oldest financial institution, First Bank of Nigeria Plc (FBN) in June 2022.
The shrewd billionaire had been in contention with the bank’s then Chairman, Tunde Hassan-Odukale, since October 2021 for the control of the financial institution after news of his shares acquisitions hit the news stand.
When news broke that Otedola had acquired 5.07 per cent shares of the bank and had, therefore, become its majority shareholder, Hassan-Odukale publicly disputed the claim, laying claim to 5.36 per cent shareholding in the holdco.
According to Odukale, he owns “cumulative equity stake” in the bank, drawn from a combination of his direct, indirect and related party shareholding in the group.
Despite NGX and the National Pensions Commission declarations that Odukale’s claim to 1.05 per cent stake held by Leadway Pensure PFA is dubious and limits his shareholding in the bank to only 4.31 per cent, the undeterred Otedola embarked on another massive share buying spree, raking up additional 2.5 per cent shares to push his total holding in the bank to 7.57 per cent by December 2021.
After about three months of deft maneuvering and intense suspense, Otedola finally succeeded in beating Hassan-Odukale to the chase by becoming First Bank’s undisputed largest shareholder.
In all, the billionaire had acquired a total of 2.71 billion shares; direct holdings of 210 million shares, and indirect stake of 2.50 billion shares.
His emergence as the single largest shareholder and the ‘defacto driver’ of the bank was hailed by many stakeholders, including shareholders, staffs and financial experts, who not only predicted that the bank will benefit from his business acumen, but that his coming will put it back on the path to profitability.
The bank did not disappoint. As predicted, the financial institution at the end of 2021 Financial Year (FY) bounced back to its leadership position by delivering a much improved performance.
However, hardly had the euphoria died down before the unpredictable Otedola did the unthinkable by divesting about a third of his equity in the bank.
On June 8, 2022, FBN Holdings reported the transactions as part of its insider dealing notification to the NGX, a mandatory filing required to be disclosed whenever a significant shareholder is selling shares.
According to FBN Holdings, Otedola had embarked on two back-to-back sales of 234 million shares on Friday, June 3rd and another 600 million shares on Monday, June 6th, 2022, respectively, totalling 834 million shares of FBN Holdings in a deal valued at about N9.28 billion.
Also, a series of filings posted on the website of the Nigerian Exchange (NGX) indicated that Otedola sold about 834,939,764.00 units representing about 30% of his shareholding in the bank, realising N10 billion.
The maneuver threw the market into panic and disarray, with many players taking massive hit. However, Otedola, it was learnt, pumped part of the N10 billion he realised from the FBN shares sale into his Geregu Power plant, while retaining the rest for the planned acquisition of one of the power plants advertised for sale by the Federal Government, the Geregu Generation Company Limited II in Kogi State.
Fast forwarded to April 2023, about two years after the FBN gambit, Otedola again made another bewildering acquisition of 6.3% stake in Transnational Corporation Plc (Transcorp Group) in a series of deft moves, using his stocks trading firm, Apt Securities and Funds Limited.
The acquisition, which was consummated between an entity owned by Otedola and AMCON made him the second largest shareholder of the company after the Chairman of Heirs Holdings and United Bank for Africa (UBA), Tony Elumelu.
Otedola’s foray set off a bidding war for the control of Transcorp, one of Nigeria’s indigenous and most recognized conglomerates, which resulted in a 128-percent boost in its stock price over the next two weeks.
Shocked by Otedola’s unexpected move, Elumelu also embarked on a massive stocks acquisition spree, acquiring an additional 9.7 billion shares in separate deals to ramp up his combined stake in the group to 10.5 billion shares or 25.9 per cent, cementing his position as Transcorp’s main shareholder.
This brazen move by Otedola shook the corporate world to its foundation, with many describing it as the most audacious move since the First Bank of Nigeria takeover saga of October 2021.
From that moment onward until the climax on April April 28, perplexed Nigerians were treated to series of intrigues, including deft moves and counter moves by the bidding parties, which eventually culminated in another shock announcement that Otedola had agreed to sell his shares in Transcorp to Elumelu.
The UBA chairman, available records suggest, paid Otedola about 400-percent premium on Transcorp’s closing price to acquire his bloc of shares.
By the time the dust settled, Otedola, who owned 2.6 billion shares or 6.3 percent of the company, was paid somewhere in the neighbourhood of N12.5 ($0.027) per share, and walked away with a N32.5 billion ($70 million) payout in capital gains fro