What began as a blessing in disguise for FBN Holdings’ shareholders and the company might end up becoming a nightmare that would cost stakeholders billions of naira, Prime Business Africa has learnt.
In the first week of July, when reports began to circulate that a deep-pocket investor was buying a large volume of FBN Holdings’ shares, the value of the equity rose by 21.5 per cent within five days, building on the 63.1 per cent bullish run recorded in the first half (H1) of 2023.

Amid the report, which disclosed that Barbican Capital Limited, owned by Oba Otudeko, is the investor mopping up shares, FBN Holdings’ share hit a peak of N22.30 kobo.

It was the highest level in the last 10 years, as the momentum was on its way to pushing FBN Holdings into the trillionaire club in the stock market, after its market capitalisation rose from N658.67 billion on Monday, July 3, to N800.46 billion on July 10.

However, this feat was short-lived, as reports began to emanate from FBN Holdings that the board and the majority shareholders they represent are moving against Otudeko, finding ways to fight off his hostile takeover and ensure he exits the company.

Ripple effect of rift among largest and majority shareholders
Prime Business Africa learnt that the dispute could impact FBN Holdings’ operations, considering Otudeko’s presence would trigger a change in the board, and shares of investors could also be at the receiving end as well.

Also, concerns have been raised that the rift might not harm FBN Holdings alone, but also impact the mood of the Nigerian stock market, especially foreign investors.

“The ongoing dispute between Oba Otudeko and FBN Holdings raises concerns about how the bank is governed. It’s still too early to fully understand the impact this will have on the Nigerian banking sector and the overall economy.

“However, it could harm Nigeria’s reputation as an attractive destination for foreign investors, as they might see it as a sign of instability in the financial sector,” Senior Investment Research Analyst, Charles Abuede said.

Note that FBN Holdings had contributed significantly to the growth of the stock market in recent weeks, as it became an investable asset for many investors, but since the dispute began to tank FBN Holdings’ share, down by 29.14 per cent between Monday’s closing price of N22.3 kobo and Friday’s N15.8 kobo, the stock market is also down by 4.44 percent, with the All-Share Index shedding 2,920.35 basis points between Wednesday and Thursday.

To read more, click on the link below
https://www.primebusiness.africa/oba-otudekos-hostile-takeover-understanding-problems-facing-fbn-holdings/