A record number of First Bank of Nigeria Holdings (FBNH) shares were traded within just eight days to October 29 amid an ongoing tussle between Femi Otedola and Tunde Hassan-Odukale over who emerges the single largest shareholder of Nigeria’s oldest bank.
Some 1.072 billion units of FBNH shares were traded in the eight day period, according to data obtained from the Nigerian Exchange Limited (NGX), representing 2.99 percent of the company’s 35.895 billion shares outstanding.
Some investors are said to be increasingly seeking exposure to FBNH due to possible share price upsides that may arise from the perceived struggle for corporate control, as each of the significant shareholders may want to increase their stakes to either retain or gain control.
Some of the buying activity is also being driven by the lender’s improving fundamentals, according to Lizzie Kings-Wali, CEO, Blackstone Capital Limited, a Lagos-based financial services firm.
“From a fundamental perspective, the improving asset quality and earnings recovery suggest the bank may have successfully stabilised its balance sheet, especially as the health of the bank is also reinforced by the growing transaction volume across its various service channels.
“Should FBN Holdings be valued from a sum-of-part perspective, it would obviously be priced well above the current market capitalisation, thus reinforcing the fact that current market price is at notable discount to FBN Holdings’ intrinsic value, a fact which may have informed recent interest of some of its significant shareholders in consolidating their respective equity holdings in the Group,” Kings-Wali said.
Read also: Scramble for First Bank shares continues
United Capital research in their weekly investment report to clients for the week-ended October 29 asked investors to HOLD the shares of FBN Holdings pic while their counterparts at GTI Securities rated the stock a BUY in line with their conviction that the upside potential of the stock over the next 12 months is significantly high when the current price is compared to the estimated fair value.
Despite sliding to a new low of N11.05 as of Friday, October 29, the lender’s shares have a year-to-date return of 54.5percent, making it the best performing banking stock on the NGX this year.
In the last few months, market watchers have seen consistent rise in equities market performance, from +1.74 percent in August to +2.55percent in September, and market now posting +4.33 percent in October, which Vetiva Research analysts in their October 29 note attributed to “persistent demand in the banking space on the back of strong valuations” among other factors. About N969 billion has been gained in Nigeria’s stock market in October.
In an October 28 note to the NGX, FBN Holdings said the group was undertaking the interim audit of its financial statements for the period ended September 30. In view of the ongoing interim audit, the company was not able to submit on October 29 the results of its operations for the third quarter ended September 30 until the conclusion of the audit.
“We expect to complete the audit, secure the approval of our primary regulator, and submit the audited financial statements to the NGX by November 29, 2021. Premised on the foregoing, the trading window for dealing in the company shares remains closed to all insiders and their connected persons until 24 hours after the release of the audited financial statements”, according to notice at the NGX signed by Seye Kosoko, company secretary, FBN Holdings.
APT Securities and Funds Limited had told the NGX that their client, Femi Otedola and his nominee, Calvados Global Services Limited acquired a total of 1,818,551,625 units of shares from FBN Holdings issued share capital of 35,895,292,791. Based on the foregoing, the equity stake of Otedola and his nominee in the Company is now 5.07percent.
Otedola’s direct holding is 10 million units while indirect holding through Calvados Global Services Limited is 1.808billion units. Ola Otedola, Femi Otedola, Temi Otedola, and Ife Otedola are behind Calvados Global Services Limited, which was registered on March 7, 2017, as a private company limited by shares.
Tunde Hassan-Odukale, current chairman of First Bank of Nigeria Limited and the largest subsidiary of FBN Holdings through direct and indirect shares built a majority shareholding in FBN Holdings Plc (FBNH), to gain controlling stake in the financial holding company this year.
As of October 26, Hassan-Odukale’s direct interest in the bank is 26,231,887 units while entities he controls indirectly own 1,897,280,212 units in the financial holding company. Put together, all the shares linked to Hassan-Odukale bring his stake equivalent to 5.36 percent of First Bank’s total outstanding shares and makes him the single largest shareholder ahead of billionaire investor Femi Otedola whose stake in FBN Holdings is 5.07 percent.
The Board of FBNH also just announced that its retiring group managing director U.K.Eke will be succeeded by Nnamdi Okonkwo, a focused and result-oriented top banker. Okonkwo who will assume office as group managing director, FBN Holdings plc effective January 1, 2022, is the immediate past CEO of Fidelity Bank plc.
The announcement could also be fuelling buy activity in the bank by investors who are eyeing gains of Okonkwo’s appointment for the bank.
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