Otedola exits Forte Oil shares in N64.3bn off-market deals

The share price of Forte Oil plc reached a new high on Wednesday, June 19, 2019 driven by record off-market trading as Nigeria’s billionaire businessman, Femi Otedola, completed the sale of his stake in the oil and gas company.

A total of 970,166,694 units of Forte Oil plc were done as off-market trades at N66.25 in five deals for a value of N64.3 billion. These deals were negotiated deals between Stanbic IBTC Stockbrokers as buyer while APT Securities and Funds Limited, WSTC Securities Limited and Quantum Zenith Securities Limited were sellers.

Authentic market sources tell BusinessDay that the value involved is far more than just the value of the cross deals.

Otedola, in a message he posted on Wednesday on his verified social media handle, said the process has been completed and that he is now prepared to focus on his investment in the power sector.

“A few years ago, my team and I embarked on an arduous task of transforming a moribund petroleum marketing business, African Petroleum plc (formerly British Petroleum) into Forte Oil plc; a leading integrated solutions provider with solid footprints in downstream petroleum marketing, Upstream Services and Power Generation and one in which we built intrinsic value to the benefits of our shareholders,” the billionaire businessman further wrote on Wednesday.

Forte Oil rallied most on the Nigerian bourse, from N31.5 to N34.65, after gaining N3.15 or 10 percent maximum limit, as investors anticipate further rally in next trading sessions.

Doyin Ogun, head of corporate services at Forte Oil, confirmed that the final transaction and shares transfer have been completed.

“There is going to be a closing board meeting, after which there is going to be some internal discussions; essentially the new majority shareholders will make a formal statement for the business going forward,” Ogun told BusinessDay.

Forte Oil plc said the decision to divest from upstream services and power-generating businesses will boost its distributable earnings for the benefit of shareholders.

Last year, Otedola, who was chairman of the oil firm, announced the plan to sell off his 75 percent stake in the company to “maximise the opportunities in refining”.

The approval was given by the shareholders at the Extra-ordinary General Meeting (EGM) of the firm held in Lagos.

The decisions which were arrived at by voting saw 90.9 percent of the shareholders approve that the company may enter into discussion with Femi Otedola or any other company representing him in connection with the assets to be divested although subject to an independent valuation on fair value, and enter into subsequent binding agreements on comparable arms-length/commercial terms in relation to the assets to be divested.

Forte Oil plc had in December last year notified the Securities and Exchange Commission (SEC), the NSE and the investing public that Otedola’s divestment from the downstream business is pursuant to his decision to explore and maximise business opportunities in refining and petrochemicals. The transaction was expected to be consummated in the first-quarter (Q1) of 2019 subject to the satisfaction of various conditions and receipt of applicable regulatory approvals.

Iheanyi Nwachukwu & Dipo Oladehinde