FBNH Slumps 10% as ‘4’ Controls 40% Shareholding
FBN Holdings record a maximum daily loss of 10% midweek as some of its stockholders begin to book early profit amidst negative public attention- in addition to the introduction of key man risk into the Holdco market valuation equation.
The financial services holdings market valuation fell below N700 billion first time after Oba Otudeko’s intimidating shares acquisition via its special purpose vehicle – Barbican Capital Limited.
Otudeko ramped up significant shareholding in FBNH Plc last week, and the billionaire who is the chairman of Honeywell Group Plc has generated heat, bad blood, and creditor reactions.
“The bulk purchase by a single shareholder will create key man risk for FBNH”, LSintelligence Associates told MarketForces Africa via email correspondence.
Recently, large shares purchases from the local bourse by influence, control seeking shareholders have pushed for rerating of FBNH market value. In a chat with MarketForces Africa about the valuation outlook, some equities analysts said the market will price FBNH correctly before and after the second quarter earnings release.
Some non-controlling interests would seize an opportunity to take an early profit as the group continues to attract negative press attention. The size of the financial services Holdco will be weighed against its dividend size and earnings performance.
Four key shareholders seeking to control about 40% of the group pose a risk to FBNH’s business outlook given that the fight for supremacy among the elephant brand lovers directly correlated to cheap insider funding expectations.
“Of course, a smart guy who had been holding on to the counter would see an opportunity to make an early exit amidst the decision of the securities exchange commission to wade into Otudeko’s share buying”, Broadstreet analysts told MarketForces Africa.
The current shareholding structure shows that just four investors control about 40% of FBNH’s 35.895 billion shares outstanding. Femi Otedola owns 9%, Tunde Hassan and Dr Mike Adenuga controls 7% each while Otudeko through targeted moves has pushed his stake to 14.8%.
At the end of the trading session on Wednesday, the stock market valued the Holdco at N694.573 billion after two days of selloffs by profit takers, from more than N800 billion in market valuation on Monday. #FBNH Slumps 10% as ‘4’ Controls 40% Shareholding