Flour Mills of Nigeria (FMN Plc) said it offered total cash of N4.20 per share as consideration for the acquisition of a majority stake in Honeywell Flour Mills Plc, according to an audited financial statement for the financial year 2022 ended in March.
In the stock market, Flour Mills of Nigeria Plc was steadied at N146.38 billion on Monday on 4.1 billion outstanding shares. Meanwhile, trading data from the local bourse shows that Honeywell Flour Mills Plc was valued at N26.011 billion on 7.93 billion shares outstanding priced at N3.28.
On November 22, 2021, FMN Plc announced that the company has an irrevocable agreement with Honeywell Group, then a majority shareholder in Honeywell Flour Mills Plc to acquire the food producers as part of its global growth strategy.
The deal was subject to approval by the regulator as well as the company’s shareholder, according to the management. FMN later obtained all approvals but the issue remains with Ecobank claims on Honeywell’s asset.
Following the announcement of the deal in 2021, Ecobank then alleged that the debt owed by Honeywell had been a subject of litigation. In an official statement, the Pan African lender said it advanced several loan facilities which included working capital to Honeywell Flour Mills Plc.
It said due to the failure of the company to liquidate the said loan facilities, the bank was constrained to commence winding up proceedings against Honeywell Group Limited at the Federal High Court, Lagos in suit no: FHC/L/CP/1571/2015.
FMN said prior to the acquisition, 75% beneficial interest in Honeywell Flour Mills Plc was held by Siloam Global Service Limited – a company controlled by Dr. Oba Otudeko and Obafemi Otudeko.
Also, First Bank of Nigeria owned 5% while more than 32,000 individuals owned 20% of the outstanding shares. Making a first-time full disclosure about the transaction, Flour Mills of Nigeria said its subsidiary, Ecowise Horizon Investment Ltd holds 71.75% of Honeywell Flour Mills Plc.
Ecowise holds 48.05% on behalf of FMN and the remaining 28.75% on a proxy for Greywise Investment Solutions Limited, an associate of FMN. The report indicates that Ecowise owns 100% of FBN’s 5% stake in Honeywell Flour Mills Plc.
“The transaction was entered into as part of FMN global growth strategy, to create a stronger and a more resilient national champion for Nigeria and further enhance food security”, the company stated.