Dr Awele V. Elumelu acquires a 5.076% shareholding stake in Transcorp Plc, strengthening the control held by her husband, Tony Elumelu.
Owning a 5% stake in a publicly quoted company in Nigeria has regulatory significance, promoting transparency and preventing insider trading and market manipulation.
Shareholders with a 5% stake gain influence and control over decision-making processes, and it can provide opportunities for lucrative exits and attractive returns on investment.
Dr Awele V. Elumelu, wife of billionaire investor Tony Elumelu has acquired 2,063,484,991 units of the total shares of Transnational Corporation Plc (Transcorp) at a share price of N3.12 per share.
The transaction which is valued at about N6.4 billion gives Dr. Elumelu a significant shareholding of 5.076% of the shares of the company. The announcement was published on the website of the NGX and is in compliance with NGX Issuers Rules for disclosing insider-related trades.
The recent acquisition by Dr Awele V. Elumelu and the subsequent exit of Femi Otedola from Transcorp Plc have brought about significant shifts in shareholding and control within the company. The acquisition effectively makes Dr. Awele Elumelu a significant shareholder of Transcorp Plc strengthening the control held by billionaire investor and husband Tony Elumelu, solidifying his position as the majority shareholder with effective control.
In Nigeria, owning a 5% stake in a publicly quoted company holds significant importance for various reasons.
Firstly, the Securities and Exchange Commission (SEC) mandates that shareholders who possess or acquire 5% or more of a company’s shares must disclose their holdings to the public and SEC.
This requirement promotes transparency in the ownership structure of publicly quoted companies and safeguards against insider trading and market manipulation.
Furthermore, owning a 5% stake grants the shareholder a degree of influence and control over the decision-making processes within the company.
While it may not confer majority control, a 5% stake can still provide a notable voice in key matters such as board appointments, corporate governance, and major strategic decisions.
This influence can play a crucial role in shaping the direction and policies of the company.
Additionally, owning a significant stake, even just 5%, in a publicly quoted company can present lucrative exit opportunities.
Should the shareholder wish to sell their shares, having a sizable ownership stake increases the chances of attracting potential buyers, including institutional investors or other shareholders.
This allows the shareholder to explore exit strategies and potentially realize a substantial return on investment.