For the past few years, the great investor, Mr. Femi Otedola, aka Otedollar, has quietly & steadily been buying into First HoldCo Plc, the parent company of First Bank Plc. By Wednesday’s latest acquisition, that steady accumulation had reached what, by Nigerian standards, can only be described as colossal.
His latest purchase, valued at a whopping ₦77.6 billion, pushed his total holdings, both directly & indirectly, to a staggering 9.99 billion shares, translating to 21.96% ownership of the company.
The market capitalisation of the institution itself currently stands at about ₦5.50 trillion, making it the most capitalised banking group amongst its peers by market value. Owning 21.96% effectively means controlling almost one-fifth of the entire company.
At today’s share price of ₦120.90, those 9.99 billion shares are worth approximately ₦1.2 trillion. Using the current exchange rates, that’s roughly $882 million in dollars, or £659 million Pounds, or €772 million Euros. However one wants to look at it, it isn’t a small amount in any currency!
So, the question on everyone’s mind is simple: & someone particularly asked the question; why would one man commit such a colossal amount to just one company?
Until @femiotedola chooses to tell the world why (maybe another best selling book is in the offing), all we can do is make informed deductions based on what we can see. As at the last time we checked, at least over 34000 people had seen that last article. With many commentaries coming in.
So let’s try answering the why!
Confidence backed by conviction. Mr. Otedola must possess an extraordinary level of conviction in the long-term prospects of First HoldCo to commit such staggering resources. It also speaks volumes about the confidence he has in the management’s ability to continue creating value for shareholders.
Influence. Owning almost one-fifth of a publicly quoted company is no small feat. It automatically makes him the single most influential shareholder, giving him a powerful voice in the company’s future direction & strategic decisions.
That, in itself, sends a very loud message to the market.
Capacity plus capability. Having ₦1.2 trillion invested in one publicly quoted company is not child’s play (not many can be that brazen). You don’t place that kind of bet unless you’ve done your homework well & you’re confident about the long-term outcome. For someone who had nearly lost it all before, which nearly led to suicide, he would have been twice shy!
Full trust in the system. This is a classic demonstration of the long game. It reflects faith in long-term investing, enterprise value & also the Nigerian capital market, rather than the pursuit of quick, instant gains.
An immense unflinching vote of confidence. Ultimately, everything still comes back to confidence. Such a bold investment naturally lifts market sentiment. Many would reasonably conclude that anyone willing to commit over ₦1.2 trillion of personal wealth into a single company must have carried out extensive due diligence. Knowing Mr. Otedola, he would have done the needful.
That confidence has a way of rubbing off on the wider investing public.
Whether this ultimately ranks amongst the greatest investment calls in Nigeria’s corporate history is for time to decide.
For now, one thing is undeniable (glaring): when Femi Otedola moves, the market pays attention.
According to Forbes, Mr Otedola, 62, is currently verifiably worth 1.3b dollars (that’s ₦1,775,111,000,000) making him one of the top 10 wealthiest Nigerians alive.
#femiotedola #firstholdco #maestromediablog #maestrolifestyl
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