BrandArena: How Otudeko-led Honeywell Acquired 4.7 Billion Shares of FBN Holdings to Become Largest Shareholder

Monday, 10 July 2023

How Otudeko-led Honeywell Acquired 4.7 Billion Shares of FBN Holdings to Become Largest Shareholder

Barbican Capital has now been revealed as the firm behind the purchase of 4.7 billion shares of First Bank of Nigeria Holdings. The transaction, completed on Thursday and valued at N87.8 billion at N19 per unit, represents the greatest volume of First Bank shares traded in a single day since 2012.

FBN Holdings formally told the Nigerian Exchange that Barbican Capital, an entity of Honeywell Group, had purchased 4,770,269,843 units from the company's issued share capital of 35,895, 292,791. Based on the foregoing, Barbican Capital owns 13.3% of the company.

The 4,770,269,843 shares bought were moved from 26 different accounts. They are Dogonyaro Investments Limited, Home Securities Limited, Skyview Estates Limited, Thames Investments & Sec Ltd, ESBI(WA) Limited, Fistful Securities Limited, Zanfara Packages, Row Park Limited, Edenvale Limited, Mansion House Limited, Bethlehem Properties Limited, Musa Haruna Foods, Yazidu Zakari Ventures Limited, Thornbull Securities Limited, Moore House Limited, Impressario Limited, Mahmoud Alheri Limited, Timothy Banfield Limited, The WhitBread Limited and Penrose Securities Limited.

Since ex- Chairman of FBN, Oba Otudeko is the owner of Honeywell Group, this means that he now controls 13.3% directly or indirectly, thus making him the largest shareholder of the bank.

According to the bank's 2022 audited reports, billionaire investor Femi Otedola owns 5.57% of the company in direct and indirect ownership.

This means that, as the main shareholder, Oba Otudeko can ask for a seat on the board and perhaps create a significant shift in the constituency.

Remember that in April 2021, the central bank replaced Oba Otudeko as chairman and disbanded the bank's board. The key reason given by the apex bank was its engagement in the bank's corporate restructuring, which included using regulatory forbearance and support to keep the bank from failing.

The CBN argued that its significant intervention prevented the bank from collapsing due to bad loans and insufficient capital adequacy ratios, thereby giving it a substantial stake in the bank’s management. Consequently, the decision to dismiss the board, headed by Otudeko, was prompted by the removal of the current MD/CEO, Sola Adeduntan, despite successfully leading the bank to profitability following years of mismanagement. The CBN subsequently reinstated Adeduntan as MD/CEO and subsequently terminated the board.

Following Otudeko’s compelled departure from the bank, it created an opportunity for other shareholders, including Femi Otedola and Odukale, to solidify their ownership in the bank. Consequently, all significant shareholders were able to appoint directors to the board of both the bank and the holding company.

Oba Otudeko’s Honeywell Group was also compelled to pay the loan it was owing First Bank. Though Honeywell Gorup said otherwise, the company had to sell its 71.69% stake in Honeywell Flour Mills to Flourmills of Nigeria, thus generating cash to pay down its loan.

So it would seem that Oba Otudeko spent some months raising money and acquiring First Bank shares to stage a comeback to First Bank.

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