Nigerian Billionaire Femi Otedola opens the Transcorp saga relationship with Elumelu
Nigerian Billionaire Femi Otedola has said that his decision to acquire shares of theTransnational Corporation of Nigeria (Transcorp) was the only motivation for him to unlock the real value of thecompany that Nigerians invest in, the public and the big companies are looking down on.
Otedola, 60, explained this in a text message he sent to somemedia outlets. This is his first comment on the saga that has rocked the Nigerian real estatemarket for the past few weeks.
In his speech, Femi Otedola explained that he promised to acquire Transcorp Plc for 250billion naira ($543m), but Tony Elumelu who is the president of the company refused him.
Recently, Otedola sold all his shares in Transcorp to Elumelu, the company's chairman and shareholder, two weeks after he amassed a 6.3% stake in the company, ending the leadership race. Elumelu previously increased its share from 2.07 to 25.9% the day after the news about Otedola's acquisition of Transcorp shares. According to journalists familiar with the situation, Femi Otedola's decision to take control of the company angered the president of Transcorp, which prompted him to initiate negotiations. According to the newspaper, he later agreed to pay the businessman several milliondollars and pay Otedola for the value of his shares.
In his speech, Otedola revealed for the first time that in 2005 he confirmed that Tony Elumelu received a large sum of money from the United Bank for Africa from Nigerian businessman Hakeem Belo-Osagie. Otedola said he gave $20 million to Elumelu, and then gave him twobillion naira. Hakeem Belo-Osagie sold his shares to Elumelu for $100 million, but Elumelu struggled to get the money. Otedola and other richNigerians joined forces to support Elumelu.
Despite this friend's generosity,Otedola says that Elumelu will continue to stab him in the back. Otedola said that when he told Elumelu of his interest in acquiring the Ughelli power plant in 2012, the Transcorp chairman "slowly proceeded"to fire him.
Otedola went on to say that the UBA chairman has taken advantage of his (Otedola's)business in a troubled businessand in the end bought money in several companies including Transcorp Hotel. Full statementby Mr. Femi Otedola, Chairman of Geregu Power PLC
In 2005, when Tony was managing director of Standard Trust Bank, he approached me to raise funds to acquire UBA. I enthusiastically gave him $20 million, or two billion naira at that time, to buy the necessary UBA shares for his acquisition. After a while the price of the stock rose and I decided it was a good time to sell and get out of the bank. However, Tony toldme to keep the shares becausehe was convinced there was afuture - so I kept the shares. Ibecame the CEO of Transcorp Hotel in 2007 with a 5% stake in it and Tony unknowingly started buying shares. The following year, 2008, I failed in Nigeria. Tony then took over my share in UBA to pay the interest on my loan and also took over my share in Africa Finance Corporation, of which I am a shareholder.
Shortly after that, Albert Okumagba told me that an American company wanted to acquire my shares in Transcorp, which I then sold. However, the alleged American companyturned out to be Tony Elumelu. This revelation prompted me to resign as the hotel's CEO.
Many years later, in 2012, Tony said he wanted to see me, so we met in my office where I was already having meetings with foreign investors who were still leaving. Curious, he asked mewhat kind of organization I had and revealed to me that I wanted to enter the power industry, specifically Ughelli Power Plant. Tony quietly took out the book for Ughelli and raised the bar by buying the factory for $300 million.
And as some would say: the rest is history. Fast forward to now...
I agreed to buy Transcorp Plc for 250 billion naira but unfortunately my offer was rejected. My goal is to make the company as strong as a Nigerian company with a market capitalization of at least two trillion naira instead of the current 40 billion naira, but it seems some shareholders have a different opinion. As an entrepreneur, I believe in healthy competition and market change. Two leaders can't sail a ship, and I respect the decision of the majority of shareholdersto buy me. It's the nature of the game.
But let's be clear: my donationwas made with the best intentions for Transcorp Plc and its shareholders. I see it as an opportunity to unlock full business potential and create value for everyone involved. It is important for investors to understand that free entry and exit is critical to a healthy market. The stock running after my acquisition is proof of the value Transcorp Plc can provide,I hope the business continues to thrive under the new management. My message to Transcorp Plc and its shareholders is: I amcommitted to the growth and success of Nigerian business,and I will find ways to create value for all stakeholders. Unfortunately, violent peopleare still harmed by getting paidwhile company owners and managers live jet set lives,which hurts violent people.Thank you for giving me the opportunity to participate in this exciting chapter in Transcorp's history.
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