First HoldCo shares reach 52-week high after N323bn transaction

The shares of First HoldCo climbed to a 52-week high of N36.45 per unit last week, according to data from the Nigerian Exchange Limited. Th...

The shares of First HoldCo climbed to a 52-week high of N36.45 per unit last week, according to data from the Nigerian Exchange Limited.

This follows significant share divestments by firms linked to businessman Oba Otudeko and a former FirstBank chairman, Tunde Hassan-Odukale, in off-market transactions on Wednesday.

Approximately 10.43 billion shares of First HoldCo were traded off-market. According to CardinalStone’s daily market report, these shares were traded at N31 per unit across 17 trades. The total transaction value was N323.33bn.

The off-market trades boosted the total volume traded on the Nigerian Exchange Limited on Wednesday by 807.03 per cent to 11.67 billion units, while total value traded soared by 1,028.44 per cent to N363.41bn.

NGX data revealed that First HoldCo shares closed trading on Thursday at N35.40 per unit, a 9.90 per cent appreciation in 24 hours and the highest it had traded in 52 weeks. It closed the week at N33.95bn, indicating a 16.46 per cent appreciation week-on-week.

According to the 2024 financial report of First HoldCo filed on the NGX, the current chairman of the holding company, Femi Otedola, is the majority shareholder with about 11.8 per cent holding in direct and indirect stake, followed by Barbican Capital Limited, which held 8.65 per cent.

Market watchers said that the large block trades marked a strong institutional interest in First Holdco Plc, with board changes, corporate restructuring, or long-term strategic investments expected to follow this transaction.

These major off-market trades come about two years after Otudeko’s Barbican Capital Limited acquired the single largest individual equity stake in FBN Holdings Plc. Barbican Capital acquired about 4.77 billion ordinary shares in the holding group, representing 13.3 per cent of the group’s 35.9 billion issued shares.

The record deal valued at N87.8bn was moved from 26 nominee and trustee accounts to Barbican Capital Limited. Otudeko served as the bank’s then group’s chairman between 1997 and 2021.

Amid the battle for control that trailed the major share acquisition by Otudeko in July 2023, the Central Bank of Nigeria issued new corporate governance guidelines that restricted the acquisition of controlling interests in any financial holding company in the country.

The CBN said this in a circular to all commercial, merchant, non-interest, and payment service banks, and financial holding companies, titled ‘Corporate Governance Guidelines’, and signed by the Director, Financial Policy and Regulation Department, Chibuzo Efobi.

The new guidelines stated that investors would need prior approval from the CBN before they could acquire majority stakes in holding companies.

In Section 19, which dealt with the protection of shareholders, the new guideline said, “Except where prior approval of the CBN is granted, no individual, group of individuals, their proxies or corporate entities shall own a controlling interest in more than one FHC.

“Except with the prior written approval of the CBN, no FHC or any of its director, shareholder or agent shall enter into an agreement which results in: a change in the control of the FHC, the transfer of shareholding of five per cent and above in the FHC; and/or an increase in shareholding to five per cent or more in the FHC.

“Provided that CBN’s prior approval and No Objection shall be sought and obtained, before any acquisition of shares of an FHC by an investor (including through the capital market), that would result in equity holding of five per cent and above: the sale, disposal or transfer of the whole or any part of the business of the FHC; the acquisition or merger of the FHC; the reconstruction of the FHC; or the employment of a management agent, management by or transfer of its business to any such agent.”

Provided by SyndiGate Media Inc. (Syndigate.info).