What began like a humming narrative has snowballed into a stunning explosive as facts have emerged that the recent feud between Nigeria’s business tycoons, Femi Otedola, executive chairman, Geregu Power Plc, and Tony Elumelu, chairman, Transnational Corporation of Nigeria (Transcorp), is beyond the battle for the soul of Transcorp.
The duo had been embroiled in a show of superior war chest following the acquisition of 5.52% of Transcorp shares, by Otedola last month, making him the second largest shareholder of the company.
Within a space of days, Elumelu fought back by 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 percent, cementing his position as Transcorp’s main shareholder.
Femi Otedola eventually sold his Transcorp shares with a premium to Tony, putting an end to an intriguing corporate drama that had shocked, rocked, and rolled Nigeria’s capital markets in recent times.
Authoritative sources revealed that the truce was brokered by influential personalities in the business and political circles, including mutual friends led by Africa’s richest man, Aliko Dangote.
A stockbroker and Head of Securities Trading at Planet Capital, Dr. Paul Uzum, said the development should be taken with some ‘caution’, as there might be more to what was in the public domain.
Speaking on the Otedola-Elumelu feud, Uzum said there could be more to the development than what was at public display because the equities market is a complex ecosystem.
“There is a lot about the equities market; it is deep and complex. Those who put their huge money in that place are not just ordinary people. Investments could be more than what we see. I do not mean the market operates in a suspicious way. What I mean is that it is deep and complex. We may not be seeing the whole story,” Uzum told us in a note.
Dr Uzum’s position seems to have been confirmed with recent revelations by Femi Otedola, accusing Elumelu of backstabbing him and cashing in on his most vulnerable moments in business.
In a statement that marked his first public intervention in the recent battle for the soul of Transcorp, Otedola made reference to various acts of backstabbing by Elumelu dating back to over 15 years.
In his recent revelations cited in media outlets, Mr Otedola opened up on how he went bankrupt in 2008 and was betrayed by Mr Elumelu.
Otedola revealed that he became Chairman of Transcorp Hotel in 2007 with a shareholding of 5% and unknowingly Tony gradually started buying shares quietly.
He went further to adduce that the following year in 2008, he went bankrupt in Nigeria during which Elumelu proceeded to take his shares in UBA to service the interest on his loans “and he also took over my shares in Africa Finance Corporation, where I was the largest shareholder.”
Otedola said, “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.”
The businessman also alleged that in 2012, he told Mr Elumelu about his interest in the Ughelli power plant and the Transcorp chair “quietly went ahead” to outbid him in the acquisition of the plant.
“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,” he had explained
“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,” Otedola had revealed, according to media outlets.
Capital market sources said the battle of huge war chests between Otedola and Elumelu is that of Greenmail which hinges on a hostile approach to take over a target company.
“Greenmail or greenmailing is the action of purchasing enough shares in a firm to challenge a firm’s leadership with the threat of a hostile takeover to force the target company to buy the purchased shares back at a premium,” Uzum told this newspaper, while confirming that the power play between Otedola and Elumelu had a deeper aspect.
National Coordinator, Pragmatic Shareholders Association, Mrs Bisi Bakare, said the capital market is a free place where people can invest and divest at will. She disagreed that a power play exists in the Otedola-Elumelu transactions.
However, a highly placed capital market source who pleaded for anonymity said, “We have not seen it all; until we hear Elumelu’s narrative.”