Transcorp owners reject Femi Otedola's bid to purchase a majority stake in the company

BILIONAIRE businessman Otunba Femi Otedola has revealed that his recent offer to buy Nigerian conglomerate Transnational Corporation for N250bn was rejected by the current ownership of the company.

Earlier this month, Otunba Otedola acquired a 5.5% stake in Transcorp, purchasing 2,245,639,251 shares of the group as part of a plan to take it over. He revealed that he had bought the shares of the company because he believed in the potential of the group to hit N2tn ($4.32bn)  in valuation but his aspiration to buy the company outright have now been rejected.

Proposed by former president Chief Olusegun Obasanjo, Transcorp was designed to be a processing to manufacturing giant with tentacles in numerous facets of the Nigerian economy. Designed along the same lines as San Miguel in the Philippines, Siemens in Germany, Mitsubishi in Japan or Daewoo in South Korea, Transcorp was to be a private conglomerate, with the government having a minority stake in it.

However, the plan appears to have faltered  in recent years but the recent purchase by Otunba Otedola has breathed new life into the project. His purchase of a considerable stake in the conglomerate led to its share price rising on the Nigerian Exchange Limited over the last few weeks.

This dream now appears to have ended, however, as the current chairman of Transcorp, Tony Elumelu looks like he is happy to stay on. Apparently, Mr Elumelu and Otunba Otedola go back a long way as they are business associates who have dealt with each other a lot in the past.

Otunba Otedola said: “I offered to buy Transcorp Plc for N250bn but unfortunately, my offer was rejected. My goal was to maximise the company’s potential as a Nigerian conglomerate with a market cap of at least N2trn instead of the current N40bn but it seems some shareholders have a different vision.

“As a businessman, I believe in healthy competition and market dynamics. Two captains cannot man a ship and I respect the majority shareholder’s decision to buy me out. This is the nature of the game.

“In 2005, while Tony was the managing director of Standard Trust Bank, he approached me to get funds to acquire UBA. I enthusiastically gave him $20m, which was N2bn at that time to buy the necessary shares in UBA for the acquisition. After a short period of time, the share price moved up and I decided it was a good moment to sell and get out of the bank.

"However, Tony appealed to me to hold on to the shares as he was convinced that there were future prospects, so I kept the shares. I became chairman of Transcorp Hotel in 2007 with a shareholding of 5% and unknowingly, Tony gradually started buying shares quietly.

“By the following year in 2008, I went bankrupt in Nigeria. Tony proceeded to take my shares in UBA to service the interest on my loans and he also took over my shares in Africa Finance Corporation, where I was the largest shareholder.

“Shortly after, Albert Okumagba informed me that an American firm wanted to acquire my shares in Transcorp, which I then agreed to sell. However, this supposed American firm turned out to be Tony Elumelu."

He added that his recent offer to buy Transcorp was made with the best intentions for the company and its shareholders. According to Otunba Otedola, he saw an opportunity to unlock the company’s full potential and create value for everyone involved.