Nigerian Billionaire Femi Otedola sells majority stake in FBN Holdings

FBN Holdings, the parent company of Nigeria's oldest bank First Bank, disclosed Otedola's transactions to the Nigerian exchange earlier this month as part of its Insider Dealing notification.  He sold roughly 834 million shares in a deal worth about N9.28 billion.

The billionaire reportedly sold the shares in two batches The back-to-back sales were originally reported by Nair on Friday, June 3rd, and Monday, June 6th, 2022, with 274 million and 600 million respectively, according to Nairametrics.

Otedola and his businesses sold around 834,939,764.00 units, or roughly 30% of his stock holdings in the banking company, according to a series of filings on the Nigerian Exchange's website. In addition, the sale cuts his shareholding from 7.57 percent to less than 1%.

According to Ripples Nigeria research, Otedola's total investment in First Bank was valued roughly N30 billion until he sold 517.93 million shares in one day. According to the study, Otedola made a N3 billion profit on his transaction, as First Bank's stock has risen 11% since the tycoon was discovered buying up shares in H2 2021.

The transaction follows a prolonged boardroom dispute about who holds the company's largest holdings. The bank's misunderstanding resulted in a series of press statements, leading the Nigerian Exchange to intervene and rectify the situation. According to the bank's most recent audit reports, the billionaire owns 7.57 percent of the company.

For the majority of 2021, the rich entrepreneur was at odds with Tunde-Hassan Odukale, the chairman of Nigeria's First Bank of Nigeria Limited about who owned the most shares in the company.

It's also unknown who's really acquiring the shares from Otedola, but such deals are frequently made by institutional investors or other billionaires with huge funds like him.

 After it was disclosed that the business magnate was scooping up shares in FBH Holding, making him the majority shareholder, the stock rose from roughly N6 to over N12, causing a scramble.

According to a source familiar with the transaction who talked to Nairametrics, this could be a clue that there is still ambiguity regarding the bank's ownership, which prompted the sale.

Otedola's possible departure from FBN Holdings might have a positive or negative influence on the company's stock, based on how investors interpret it.

Moreover, an exit that signals there are problems within the bank might have a detrimental impact on the its stock price, especially if the billionaire investor's comment suggests that's the reality.

The share price of FBN Holding declined 3.11 percent on Wednesday, to N10.9, or little below N11, at the market close on Tuesday.