Billionaire businessman Femi Otedola recently disclosed that his offer to purchase Nigerian conglomerate Transnational Corporation Plc (Transcorp) for N250 billion had been rejected. Otedola made these revelations in a statement to TheCable, outlining his reasons for acquiring and subsequently selling shares in Transcorp. His statements also shed light on alleged business disputes with Transcorp’s Chairman, Tony Elumelu.
Expressing his belief in Transcorp’s potential, Otedola revealed that he had initially purchased shares with the aim of driving the company’s valuation to at least N2 trillion.
However, it appears that some shareholders had a different vision, leading to the rejection of Otedola’s acquisition offer. Otedola, acknowledging the principle of healthy competition and market dynamics, respected the majority shareholder’s decision to buy him out, stating that this was the nature of the game.
Delving into their history, Otedola highlighted past business dealings with Tony Elumelu. He recounted an incident in 2005 when Elumelu, then the Managing Director of Standard Trust Bank, approached him for funds to acquire UBA.
Otedola provided $20 million (equivalent to N2 billion at the time) to purchase UBA shares for the acquisition. Despite the share price subsequently increasing, Elumelu convinced Otedola to hold onto the shares due to perceived future prospects.
Otedola further revealed that he became the chairman of Transcorp Hotel in 2007 with a five percent shareholding. Over time, Elumelu quietly acquired shares, and in 2008, when Otedola faced financial challenges in Nigeria, Elumelu utilized his UBA shares to offset the interest on Otedola’s loans.
Additionally, Elumelu took over Otedola’s shares in Africa Finance Corporation, where he was the largest shareholder. Subsequently, Otedola agreed to sell his shares in Transcorp to an American firm, only to discover later that the firm was actually Tony Elumelu.
The billionaire businessman continued his account by mentioning an incident in 2012 when he expressed interest in entering the power sector, specifically the Ughelli Power Plant. However, Elumelu outbid Otedola by offering $300 million to acquire the plant.
Otedola emphasized that his offer to purchase Transcorp was made with the intention of unlocking the company’s full potential and creating value for shareholders.
He stressed the importance of free entry and exit in healthy markets and noted the increased scramble for shares following his acquisition as a testament to the value that Transcorp can offer. Otedola expressed his hope that the company would continue to thrive under new leadership.
As of press time, efforts to obtain comments from Transcorp Chairman Tony Elumelu were unsuccessful, and no official statement was released by Transcorp Group regarding the matter.