Oba Otudeko’s Resurgence: Acquires 4.7 Billion Shares of First Bank, Aiming for Board Comeback!

It has now been revealed that the company behind the purchase of 4.7 billion shares of First Bank of Nigeria Holdings is Barbican Capital. The deal which was done on Thursday and valued at N87.8 billion at the rate of N19 per unit, is the largest volume of First bank shares traded in a single day since 2012.

FBN Holdings notified the Nigerian Exchange officially that Barbican Capital, an affiliate of Honeywell Group, had acquired an aggregate of 4,770,269,843 units of from the company’s issued share capital of 35,895, 292,791. Based on the foregoing, the equity stake of Barbican capital is 13.3%.

The 4,770,269,843 shares bought were moved from 26 different accounts. They are Dogonyaro Investments Limited, Home Securities Limited, Skyview Estates Limited, Thames Investments & Sec Ltd, ESBI(WA) Limited, Fistful Securities Limited, Zanfara Packages, Row Park Limited, Edenvale Limited, Mansion House Limited, Bethlehem Properties Limited, Musa Haruna Foods, Yazidu Zakari Ventures Limited, Thornbull Securities Limited, Moore House Limited, Impressario Limited, Mahmoud Alheri Limited, Timothy Banfield Limited, The WhitBread Limited and Penrose Securities Limited.

Since ex- Chairman of FBN, Oba Otudeko is the owner of Honeywell Group, this means that he now controls 13.3% directly or indirectly, thus making him the largest shareholder of the bank.

According to the Bank’s 2022 audited accounts, billionaire investor, Femi Otedola is the highest shareholder of the bank with a direct and indirect holding of 5.57%.

This means that Oba Otudeko can ask for a seat on the board, now being the majority shareholder and even cause a major change to its constituency.

Recall that in April 2021, Oba Otudeko was removed as chairman, and the board of the bank was dismissed by the central bank. The primary reason provided by the apex bank was its involvement in the bank’s corporate restructuring, utilizing regulatory forbearance and support to prevent its failure.

The CBN argued that its significant intervention prevented the bank from collapsing due to bad loans and insufficient capital adequacy ratios, thereby giving it a substantial stake in the bank’s management. Consequently, the decision to dismiss the board, headed by Otudeko, was prompted by the removal of the current MD/CEO, Sola Adeduntan, despite successfully leading the bank to profitability following years of mismanagement. The CBN subsequently reinstated Adeduntan as MD/CEO and subsequently terminated the board.

Following Otudeko’s compelled departure from the bank, it created an opportunity for other shareholders, including Femi Otedola and Odukale, to solidify their ownership in the bank. Consequently, all significant shareholders were able to appoint directors to the board of both the bank and the holding company.

Oba Otudeko’s Honeywell Group was also compelled to pay the loan it was owing First Bank. Though Honeywell Gorup said otherwise, the company had to sell its 71.69% stake in Honeywell Flour Mills to Flourmills of Nigeria, thus generating cash to pay down its loan.

So it would seem that Oba Otudeko spent some months raising money and acquiring First Bank shares to stage a comeback to First Bank.

However, unconfirmed reports state that some of the majority shareholders of FBN Holdings Plc are joining forces to fight off Oba Otudeko from coming back to the board. As they believe that a return to the era under Otudeko would not bode well for the bank.

The Central bank has not made any statement on the issue as the apex bank is no longer headed by the former Governor, Mr Godwin Emefiele.