Otedola acquires controlling stake worth N30bn in First Bank?

The former Chairman of Forte Oil Plc, Femi Otedola has reportedly acquired majority shares of the Bank. Multiple reports have it that the billionaire bought shares worth N30bn making him the bank’s largest single shareholder. With the major share purchase, Otedola, being the largest shareholder, holds the highest voting shares, giving him power to dictate the direction of the bank through his voting power. With the development, the bank, which is the country’s oldest, saw its share price rise to N12.25, from N12.1 traded on Wednesday on the Nigerian Exchange Group Ltd. This represents 1.24 per cent rise between Thursday and Friday. First Bank led the gainers chart with stock volume of 149,516,786 traded worth N1,853,437,127, making it the most traded stock by volume and value on the NGX. The bank’s market capitalisation was N439,717,336,702 according to data available on the NGX. The bank has an outstanding share of 35,895,292,792.

Otedola according to sources with knowledge of the transaction took over FBN Holdings with an acquisition of about N30bn worth of shares, making him the single largest shareholder of the bank. Consequently, Otedola, being the largest shareholder, holds the highest voting shares, giving him power to dictate the direction of the bank through his voting power. The battle for the control of Nigeria’s oldest lender, among two power blocs dominated by key shareholders with interests in its ownership, was at the heart of the recent shake-up of the bank’s board. One of the blocks is led by Nigeria’s second richest man, Mike Adenuga. On April 29 this year, the Central Bank of Nigeria dismissed the boards of the bank and its holding company, FBN Holdings, in a dramatic move that came a day after the bank appointed a new managing director. The regulator reinstated the former Managing Director of the bank, Adesola Adeduntan.

The CBN said First Bank, which has over 31 million customers with a deposit base of N4.2trn, shareholders’ funds of N618bn, has for years been plagued by “bad credit decisions, significant and non-performing insider loans and poor corporate governance practices”. It was learnt that a key reason for the crisis is the tussle for control of the bank between a block led by Oba Otudeko, who until recently was the chairman of FBN Holdings’ board, and Adenuga, who recently emerged as one of the biggest shareholders in the bank. While Otudeko and Ibukun Awosika, his ally on the board of FirstBank of Nigeria Limited, were removed from their positions as chairmen of FBN Holdings and FirstBank respectively, Adeduntan, who represented the interest of a late Ibadan mogul and prominent shareholder, Arisekola Alao, was reinstated as the bank’s chief executive.