Nigerian billionaire Femi Otedola makes fresh $12 million move days after signalling plan to take majority control of Nigeria’s oldest banking giant

Nigerian billionaire Femi Otedola has bought another ₦18.1 billion ($12 million) worth of shares in First HoldCo, making his latest move towards the majority ownership of one of West Africa’s largest financial groups.

Nigerian billionaire Femi Otedola has increased his stake in First HoldCo to about 26.1% after another ₦18.1 billion share purchase. (Dailynews)

• Femi Otedola has bought another ₦18.1 billion worth of First HoldCo shares.
• The purchase lifts his stake to about 26.1%, strengthening his control of the group.
• Otedola has said his investment strategy targets ownership above 51%.
• His buying spree has helped push First HoldCo’s market value above ₦6 trillion.

The transaction is particularly significant because it comes just days after Otedola publicly signalled that his ambitions for the banking group extend well beyond his current position as its largest shareholder.

A regulatory filing dated August 7 showed that Calvados Global Services Limited, an investment vehicle linked to Otedola, acquired 138.04 million First HoldCo shares at ₦131.20 each on the Nigerian Exchange.

The purchase was worth approximately ₦18.11 billion and increased Otedola’s holdings to about 11.90 billion shares, representing roughly 26.1% of First HoldCo.

It is the latest in a rapid series of purchases by the billionaire as he consolidates his influence over the financial group that owns FirstBank, one of Nigeria’s oldest and largest commercial banks.

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Just last week, Otedola’s Calvados acquired 1.78 billion First HoldCo shares for ₦222.2 billion, or roughly $160 million, taking his interest from 21.96% to about 25.9%.

That followed another purchase of 706.1 million shares worth ₦77.6 billion in July. He had also acquired 672.9 million shares worth ₦29.6 billion in June.

Taken together, the latest transactions underline the speed at which Otedola is building his position in the banking group.

First HoldCo, the parent company of FirstBank, has seen its market value surge above ₦6 trillion amid a sharp rally in its shares. [Photo: George Osodi/Bloomberg of Nigeria Plc head office in Lagos, Nigeria, on Monday, Oct. 26, 2015. [Photo: George Osodi/Bloomberg

More importantly, the latest purchase comes only days after Otedola provided perhaps his clearest indication yet of where the buying spree could ultimately lead.

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In an interview with Nairametricspublished on August 3, Otedola said his investment strategy has historically been built around controlling stakes and indicated that First HoldCo is on a similar trajectory.

“My investment threshold is always above 51%,” Otedola told the publication, referring to the strategy he previously employed at Forte Oil, now Ardova, and power producer Geregu Power.

Crossing 51% would give Otedola majority ownership of First HoldCo, although his current 26.1% holding means he remains some distance from that threshold.

His purchases, however, are already reshaping the ownership structure of one of Nigeria’s most important financial institutions.

First HoldCo traces its banking operations to FirstBank, founded in 1894, giving the group a history spanning more than 130 years and a footprint extending beyond Nigeria into several African markets and the United Kingdom.

Otedola’s accumulation has also coincided with an extraordinary rally in First HoldCo shares.

The stock reached about ₦148.35 on Friday, valuing his approximately 11.9 billion shares at around ₦1.77 trillion, more than $1 billion at recent exchange rates.

First HoldCo itself crossed the ₦6 trillion market-capitalisation threshold earlier this week, becoming the first Nigerian banking group to reach that level.

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BusinessDay reported on Friday that the stock touched ₦150 as investors continued to pile into the shares amid Otedola’s accumulation.

The rally represents a dramatic revaluation of the lender and has magnified the value of the billionaire’s position as he continues to buy.

Otedola has previously said he has committed about ₦600 billion of his personal capital to First HoldCo, describing the investment as a long-term attempt to rebuild value in the institution.

His latest ₦18.1 billion purchase is small compared with the ₦222.2 billion block acquired last week.

But coming immediately after his comments about eventually owning more than half of the company, it provides the clearest indication yet that the billionaire’s accumulation of First HoldCo shares has not ended.