Fakoyejo OlalekanFemi Otedola’s exit from Transnational Corporation (Transcorp) has cost the company’s shareholders -24.35 per cent of their investments.
After reports circulated on Friday, 28 April, that Otedola is no longer a shareholder at Transcorp Plc, the firm’s share halted its bullish run.
Join our WhatsApp ChannelPrime Business Africa had reported that Otedola bought 6.3 per cent stake in Transcorp as of 20 April. The reports of his interest in Transcorp blew the share value through the roof to hit a peak.
Thanks to Otedola, Transcorp investors’ investment grew by 123 per cent within three weeks, as the share price rose from N1.40kobo to N3.12kobo between 12 April, when reports of Otedola mopping the firm’s shares broke, and 28 April, when it was reported that Otedola has sold his shares.
During the three-week period, Transcorp shareholders gained N69.91 billion, with the company’s market value rising from N56.90 billion to N126.82 billion, according to Prime Business Africa market analysis of Transcorp share movement.
However, half of this gain has now been lost after Otedola sold his shares to Transcorp’s single majority shareholder and Chairman, Tony Elumelu, to end their feud after fighting for control of the diversified investment company.
Recall that after Otedola bought the about 6 per cent stake, he toppled Elumelu, forcing the chairman to increase his stake from 2.06 per cent to over 30 per cent ownership to snatch control of Transcorp back from Otedola.
The report of Otedola didn’t go down well with the capital market, as equity investors’ interest in Transcorp dropped significantly, pulling the share price of the firm down by -24.35 per cent to N2.36kobo from N3.12 kobo between 27 April to 11 May.
Prime Business Africa gathered that the -24.35 per cent drop means Transcorp shareholders lost N30.89 billion to Otedola’s exit.
Aside from the loss, Transcorp’s market valuation also dwindled within the period, falling from N126.82 billion recorded on 27 April to N95.92 billion as of 11 May.
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