Dangote Cement: Will Otedola’s FBN Holdings, Transcorp moves re-echo?

For those who know Nigeria’s billionaire businessman Femi Otedola, he doesn’t like taking second seat when it comes to any investment of interest. He had tried taking the front seat from the Odukalas in FBN Holdings Plc, but it didn’t work.

He took a shot at Transnational Corporation Plc (Transcorp) for a front seat, but Tony Elumelu didn’t give it up. The latest is a report (yet to be confirmed) that he is buying shares of Dangote Cement, triggering concerns whether he will this time be comfortable occupying the second seat in the company owned by Aliko Dangote.

Dangote is the founder, chairman, and CEO of the Dangote Group, the largest industrial conglomerate in West Africa. The Bloomberg Billionaires Index estimated his net worth at $16.1 billion in November 2023, making him the richest person in Africa, the world’s richest black person, and the world’s 107th richest person overall.

Otedola and his nominee, Calvados Global Services Limited, had on October 23, 2021, through APT Securities and Funds Limited, acquired a total of 1,818,551,625 units of shares from FBN Holdings issued share capital of 35,895,292,791, making his then equity stake in the financial holding company 5.07 percent.

Before he reduced his stake, Otedola and Hassan-Odukale were in contention over who was the single largest shareholder after the news about Otedola’s share acquisitions broke that October.

Otedola, a serial investor and chairman of Geregu Power Plc, had also made a similar attempt at Transcorp but his bid was rejected as Elumelu acquired fresh 9.7 billion shares of the company in separate deals, turning the tables to take the prime spot.

Otedola, renowned for his stock-picking boldness, was one of the major drivers of the stock market’s bull run in 2023, after he showed interest in Transcorp.

The market saw a successful outing in 2023, which pushed return higher at 45.90 percent.

Dangote Cement shares are up this year by 48 percent, a development linked to Otedola picking up of the stock. The stock has seen a remarkable gain, opening at N317 per share this year and closing at N538.80 on Friday.

His 2023 buying into Transcorp shares sparked a rally that pushed the stock into the five top-performing stocks of the year. The stock rose from below N2 per share to N19 per share. When he acquired shares in FBN Holdings, it was trading below N5 in 2022. The stock recently hit the trillion-naira market cap and exchanged at around N30 per share.

At 26 percent as of Friday, the stock market of Africa’s largest economy offers investors the best return globally.

Last week, the Nigerian stock market overtook that of Argentina in terms of returns.

The bulls have continued to dominate the stock market activity this year. The market has seen only one session of negative close.

The market has defied Monday’s inflation report as investors’ interest in equities pushed the benchmark performance index above 90,000 basis points last week.