Femi Otedola buys into Transcorp

Nigerian billionaire businessman, Femi Otedola, made headlines on 12 April after acquiring 5.52% of Transcorp Plc’s shares, making him the company’s largest single individual shareholder.

Otedola now trails Transcorp’s largest shareholder, Tony Elumelu’s United Bank for Africa, which holds a 9.25% stake in the company.

The acquisition of about 2.245bn shares has caused a significant stir in the Nigerian financial market, with Transcorp emerging as the most traded stock on the NGX.

Before Otedola’s investment, stock traders had shown little to no interest in Transcorp’s shares, but the move has spurred a flurry of market activity. In the week since the acquisition was announced, the share price has risen 75%, rom N1.4 to N2.45 per share, an average of roughly 10% per day.

Transcorp, a Nigerian conglomerate with interests across hospitality, energy, and agriculture was founded in 2004, and listed on the Nigerian Stock Exchange (NSE) in 2007. Its subsidiaries include Transcorp Hotels, which operates the iconic Transcorp Hilton Abuja and Transcorp Hotels Calabar, and Transcorp Power, which operates power plants across the country.

Powering up

Otedola is no stranger to investing in the power sector, having recently taken his power-generating company, Geregu, public. The stock debuted at ₦110 per share late last year but rose to ₦120 the next day. It currently trades at about ₦300 per share, and in Q1 2023, it ranked the 3rd best-performing stock on the NGX.

This latest move by Otedola has sparked interest in the Nigerian power sector, with industry analysts predicting a significant boom in the coming years. The power sector has recently been overhauled, with the government making big efforts to boost power generation and distribution in the country. As a result companies in the sector, are expected to become more profitable, with investors like Otedola positioning themselves to benefit from the surge in new infrastructure and solutions.