First HoldCo’s N1.15trn Block Sale Tests Market Depth, Price Discovery

BY OLUSHOLA BELLO AND BUKOLA ARO-LAMBO, Lagos

The sale of 10.434 billion shares in First HoldCo Plc by RC Investment Management Limited could reshape the ownership structure of one of Nigeria’s largest financial groups while providing a major test of market depth, investor appetite and price discovery on the Nigerian Exchange.

The shares were offered at N110 each. The offer opened on August 3, 2026 and closed on August 14, 2026, putting the value of the block at approximately N1.148 trillion. RC Investment Management acquired the stake at N31 per share through 17 negotiated transactions in July 2025, resulting in a total acquisition cost of about N323.45 billion. At the proposed sale price, the block has recorded an apparent increase in value of about N824.9 billion, representing a gain of N79 per share, or approximately 254.8 per cent, over the acquisition price.

However, market analysts cautioned that the N824.9 billion difference should not be regarded as confirmed profit. Financing and interest costs, taxes, advisory and brokerage fees, structuring expenses and other obligations associated with the investment could materially reduce the eventual return.

First HoldCo’s corporate governance report identified RC Investment Management as the direct holder of 10.434 billion shares as of December 31, 2025, representing 23.47 per cent of the company’s issued shares at the time. By June 2026, the holding stood at 22.94 per cent, reflecting changes in the company’s issued share capital.

The proposed transaction is a secondary-market disposal rather than a capital-raising exercise by First HoldCo. Consequently, the approximately N1.148 trillion consideration will go to the selling shareholder and other parties entitled to the proceeds under the underlying investment structure, rather than to First HoldCo as fresh equity capital.

For investors, the more immediate issue is what the disposal means for First HoldCo’s ownership structure, free float and trading liquidity. If one investor acquires the entire block, the buyer would emerge as one of First HoldCo’s largest shareholders, holding close to one-quarter of the company and potentially gaining significant influence within its shareholder structure. A wider distribution among institutional and other investors could produce a different outcome by broadening the shareholder base and increasing the volume of shares available for trading. That could support liquidity and improve price discovery over time.

Speaking with LEADERSHIP yesterday, the chairman of Proshare, Mr Olufemi Awoyemi, described the recent block share transaction involving First Holdco as a ‘novel market structure’ and not an indication of any illegality.

Awoyemi highlighted that the transaction arises from a need to address ownership conflicts within a systemically important bank, saying that “let’s start with the fundamental insight that there is often more than meets the eye in financial markets. While this might suggest underlying complexities, it doesn’t equate to illegal activity.

“The world of high finance often necessitates strategic structuring, packaging, and other intricate manoeuvres, which are perfectly legitimate.”

Awoyemi explained that the unusual nature of the transaction stemmed from the involvement of the Office of the Attorney General, which caught many market participants by surprise.

“The need arose to settle various conflicts related to First Bank, particularly concerning an issue linked to a prominent figure in the industry. The Central Bank of Nigeria (CBN) completed ownership verification and reached conclusions, but additional resolutions were necessary as new stakeholders entered the picture. I believe some arbitration took place during this process,” he said.

He explained that, because the bank was unable to repurchase its own shares, a special-purpose vehicle was created as part of the arbitration process to manage them.

“This culminated in the creation of a vehicle, ‘RC Investment,’ which stands for Renaissance Capital. This structure was designed to hold shares that belonged to other parties exiting the bank.”

Addressing the increase in First Holdco’s share price, Awoyemi noted that the market was responding to Mr Femi Otedola’s share accumulation.

“Importantly, he was acquiring shares at market prices, not discounted rates, indicating transparency and accessibility; any interested buyer had the same opportunity,” he stated

He mentioned that the sale appears to be finalised, with institutional investors, including pension companies, also assessing opportunities.

Awoyemi expressed optimism that the introduction of a substantial shareholder would enhance stability and expedite decision-making at First Holdco.

He noted that “analysing other successful banks in Nigeria reveals that they typically thrive under stable, dominant ownership. This can be a positive turning point for our market.”

He highlighted that the block represents a noteworthy portion of the bank’s free float, saying that “this is a constructive resolution to an ongoing issue. However, it is substantial; the last figure I saw indicated it was around 40 per cent of the free float.

“The key concern is that such a significant acquisition could push his ownership past the 30 per cent threshold, given that he is already at 26.5 per cent. At that point, he would hold a dominant position.”

Awoyemi called upon the Nigerian Exchange to enhance market understanding of such innovative structures, recognising this transaction as a groundbreaking instance locally.

“I genuinely believe there’s nothing inappropriate in how this block investment has been executed. It’s a novel approach, and the Nigerian Exchange should take steps to educate the market on these innovative mechanisms,” he advised.

Also speaking to LEADERSHIP, the managing director of Globalview Capital Limited, Aruna Kebira, said the use of special-purpose vehicles and negotiated transactions to execute sizeable share transfers was permissible and common in capital markets, particularly where the volume involved could materially affect normal market activity.

According to Kebira, large investors may use such structures to limit excessive buying or selling pressure that could distort price discovery. Attempting to dispose of more than 10 billion shares through ordinary market trading, he said, could create a substantial supply overhang and put downward pressure on the stock.

A negotiated transaction, he explained, allows a large block to be matched directly with investors capable of absorbing the position without flooding the open market with supply.

Kebira said prospective buyers could have different investment objectives, ranging from strategic, long-term investment to portfolio rebalancing or shorter-term trading, while an existing shareholder’s decision to exit could reflect its investment strategy, liquidity requirements, and broader portfolio considerations.

Another market operator, a senior stockbroker who spoke on condition of anonymity, told LEADERSHIP that a transaction of this size would ordinarily attract the applicable regulatory oversight and market-surveillance framework, including scrutiny by the Central Bank of Nigeria (CBN) and the Securities and Exchange Commission (SEC), given its potential implications for ownership concentration, market integrity and financial stability.

The stockbroker also stressed that the proposed transaction should not be confused with a capital raise by First HoldCo because the shares being sold already exist. The proceeds, therefore, accrue to the selling shareholder and other parties entitled to them under the investment structure, rather than being injected into First HoldCo.

Analysts said the distinction is important because the transaction would not, by itself, increase First HoldCo’s regulatory capital or strengthen its balance sheet. Any benefit to the company would be indirect, potentially arising from a broader shareholder base, improved free float, stronger secondary-market liquidity and greater transparency over ownership.

Attempts to obtain the positions of the Securities and Exchange Commission (SEC) and the Nigerian Exchange Limited (NGX) on the matter were unsuccessful.

The Deputy Director, External Relations at the SEC, Mrs Efe Ebelo, was unreachable by phone and did not respond to messages.

Similarly, Team Lead, Media Relations at the NGX, Mr Joseph Kadiri, had not responded as at the time of filing this report.

RC Investment Management acquired the shares from Barbican Capital Limited and its affiliates, as well as Leadway Group and its affiliates, in July 2025. First HoldCo subsequently confirmed that neither its chairman, Femi Otedola, nor the Federal Government acquired the shares in that transaction, while the Attorney-General of the Federation also denied any Federal Government involvement.

The proposed disposal comes against the backdrop of a sharp re-rating in First HoldCo’s share price, raising questions about whether the market can absorb such a large block at current valuation levels.

First HoldCo’s audited 2025 financial statements showed that the stock closed the year at N47.90, compared with N28.05 a year earlier. By June 30, 2026, it had risen to N56.05, then accelerated sharply in July, climbing from N57.20 at the beginning of the month to N129.55 on July 31. At N110 per share, the proposed block is therefore priced below the July 31 market close. Market participants said the discount could make the position attractive to institutional investors seeking to acquire a substantial holding at a price below the prevailing market price.

The ultimate success of the transaction, however, will depend on the depth of demand, prevailing market conditions and the commercial terms attached to the sale. The chief executive officer of First Bank, Olusegun Alebiosu, has described demand for the offer as “overwhelming” and expressed confidence that the book would close quickly.

If the block is absorbed at or around the proposed price, the transaction could provide a strong indication of institutional appetite for First HoldCo at its current valuation. A weaker response, on the other hand, could force investors to reassess demand for the stock at elevated price levels.

The sharp rise in the share price has already prompted questions about the extent to which the re-rating is supported by underlying fundamentals, rather than by liquidity conditions, investor positioning, and broader market sentiment. Professor Tayo Bello, a financial analyst and adjunct professor at the University of Ibadan, questioned whether the scale of First HoldCo’s appreciation was fully supported by its fundamentals.

Bello said share prices are generally influenced by a combination of earnings and financial performance, management quality, historical performance and prevailing market conditions. He also questioned the basis for the sharp appreciation in First HoldCo’s share price, particularly in the absence of a dividend payment in the last financial year, and compared the company’s performance with other major banks that have continued to return value to shareholders through dividends.

According to him, sustained buying interest combined with a relatively limited supply of the shares may have contributed to the rapid re-rating, potentially pushing the stock higher than its underlying fundamentals alone would justify.

The proposed disposal, therefore, presents two important tests for the market: whether sufficient demand exists to absorb a block worth about N1.148 trillion and whether investors are prepared to transact at a valuation that has risen sharply over the past year. For existing shareholders, the more important issue may ultimately be who acquires the shares and how the new ownership structure affects corporate governance, liquidity and market perception.

A distribution of the block among several institutional investors could broaden First HoldCo’s shareholder base, increase free float and deepen secondary-market liquidity. A single buyer, however, could emerge with about 22.94 per cent of the company, creating another significant centre of influence. The transaction could also remove the large ownership overhang created by RC Investment Management’s July 2025 acquisition.

Given First HoldCo’s ownership of First Bank, the identity, investment horizon and strategic intentions of the eventual buyer or buyers will be closely watched by investors, regulators and the wider market.

More broadly, the proposed transaction represents a major test of the Nigerian capital market’s capacity to facilitate the orderly transfer of a stake worth more than N1 trillion without destabilising the share price or disrupting normal market trading.