Tony Elumelu acquires over 25% Stake of Transcorp in Response to Femi Otedola’s recent Takeover
In a Facebook post, a business content creator and business man, Chukwudi Iwuchukwu, analyzes Tony Elumelu’s increased stake in Transcorp in response to the fear of Femi Otedola’s take over of the company. He also presents why Femi Otedola wants to take over the company. He writes that:
“The battle for the soul of Transcorp Group continued in April 2023 as Heir Holdings, owned by Nigerian celebrity billionaire, Tony Elumelu, announced on the stock exchange floor that his firm has acquired a quarter stake (over 25%) in Transcorp.
Tony Elumelu acquires over 25% Stake of Transcorp in Response to Femi Otedola’s recent Takeover
HH Capital Limited, Tony Elumelu’s company, acquires 9.7 billion units of Transcorp, bringing their total holdings to 25.6% of the company’s total shares.
Before now, Femi Otedola had acquired the first 5% of the stake in the company belonging to his friend and brother two weeks ago.
He went ahead some days later to increase his stake by acquiring another 1.5% stake in Transcorp, taking his total stake to 6.5%. This made Femi Otedola one of the highest stakeholders in the company.
The rule that put fear in other investors was that Otedola would not stop until he takes over Transcorp Group by acquiring 25% of the company and launching a hostile takeover of the company.
Sensing blood and not wanting to be caught napping, Tony made his chess move by acquiring 25% of the company he joined in 2012.
With this move, Tony now has 38% ownership of Transcorp through direct and indirect means, placing the company firmly in his hands.
Femi Otedola would likely react to this. However, you should know why Transcorp is a suddenly attractive to Femi Otedola.
Why Femi Otedola wants to Acquire Transcorp?
Transcorp is a conglomerate that owns the following assets:
Transcorp Hilton in Abuja and Lagos (the Lagos project is underway)
They own a power plant known as Genco in Ughelli and Afam.
The power plant is the group’s biggest cash-producing asset, and cash brought insight over 410 billion naira to their bottom line last year.
Transcorp Hotel Abuja just brought in 31 billion naira.
Then the group owns an oil well, OML 19, which they bought from Shell two years ago for $1 billion.
The oil well has yet to start contributing anything to Transcorp’s group top line.
The business Transcorp is not doing badly either, as they made a revenue of N442.7 billion in 2022, with a profit of 30 billion nairas.
Femi Otedola’s target is the power plant.
He owns the Geregu power plant, and he has seen the possibilities and the value creation in that ecosystem, and he believes that Tony is not running those power plants as efficiently as he should have.
For example, Gerugu alone is worth 800 billion nairas, while Transcorp, which has two bigger power plants, is worth only 100 billion naira.
Very poor by all standards.
So Femi, with his eyes set on the power plants owned by Transcorp, wants to unlock the business’s true potential.
We anxiously await Femi Otedola’s next move in the chess game and the power struggle for Transcorp’s soul following Tony Elemelu’s chess move today to protect his company.”
Source: Chukwudi Iwuchukwu
Content Creator and Business Man on Facebook