Otudeko reduces exposure in flour market, sells stake in Honeywell

Oba Otudeko, chairman, Honeywell Flour Mills Plc (HFMP) is planning to reduce his exposure in the flour market by selling his indirect stake in the company to Flour Mills of Nigeria (FMN), a major competitor in the sector.

Otudeko owns 74.56 percent stake in Honeywell through his investment firm, Siloam Global Services Limited, but he would be selling 71.69 percent to reduce his exposure in the flour market.

The stake is valued at N80 billion according to FMN, but when HFMP’s share is pegged to current market price, it cost around N20.04 billion, which means a gain of N60 billion to Otudeko.

FMN, owned by Greek-American billionaire, John G. Coumantaros, will also buyout First Bank Nigeria Holdings, which is the second largest stakeholder with about 5 percent.

According to a statement released to the capital market on Monday, FMN disclosed that, “Given FMN’s parallel negotiations for both stakes culminating in the agreements being signed on the same date, the basis for arriving at key commercial terms including final equity price per share, will be the same.

“The price payable to FBN Holdings will be the same with HGL’s.” the statement read, but current market price values FBN Holdings buyout fee at N1.35 billion [but terms will be different upon completion].