November 25, 2021 / 09:44 AM / by Proshare Research/ Header Image Credit: EcoGraphics
The managements of both Honeywell Flour Mills and Flour Mills of Nigeria Plc have both issued official statements assuring stakeholders that the recent announcement to acquire majority stake in Honeywell Flour Mills Plc ("HFMP") on Monday 22nd of November, 2021, was made after carrying out necessary due diligence and obtaining appropriate legal guidance.
This was in reaction to the publication captioned "Ecobank Warns against Acquisition of Honeywell Flour Mills, Alleges Company Facing Winding Up Proceedings" see link below
Related Link: Ecobank Nigeria Warns Flour Mills Against Honeywell Deal - Nov 24, 2021
Below are the statements from the two entities released via the Nigerian Exchange (NGX).
Re: Purchase of Honeywell Group Limited's 71.69% Stake in Honeywell Flour Mills Plc
Honeywell Flour Mills Plc ("HFMP") assures its stakeholders that the recent announcement on Flour Mills of Nigeria Plc"s ('FMN') acquisition of a majority stake in HEMP on Monday 22nd of November 2021, was made in compliance with all rules and regulations. This further assurance has become necessary in view of the publication captioned "Ecobank Warns against Acquisition of Honeywell Flour Mills, Alleges Company Facing Winding Up Proceedings"
It is pertinent to set the record straight that there is no Winding up Petition currently pending or live against HFMP in any Court in Nigeria. There is also no pending Court Order restraining trading in the shares of HFMP or inhibiting HFMP or its owners from dealing in its assets. HFMP assures its investors, regulators and stakeholders that in all of its engagements with FMN, it received independent legal advice and asserts that the transaction is not in breach of any subsisting Order of Court. The issue as to whether HFMP is indebted to Ecobank is still before the Courts and the final decision remains the exclusive preserve of the Courts. It is also important to state that the Court of Appeal Judgement being referred to in the reports did not declare HFMP to be indebted to Ecobank.
The assertions lack merit, were written in bad faith and are a deliberate attempt to undermine a transaction that will result in substantial benefit to the Nigerian economy and entrench the collaboration of two publicly quoted companies. As a responsible corporate citizen, we have entered the transaction with FMN having taken all legal issues into consideration.
All stakeholders are hereby assured that management of Honeywell Flour Mills Plc will continue to act in the best interests of all concerned and work diligently to preserve value for all its shareholders.
We expect that from the proposed combination, stakeholders will benefit from the more than 85-year combined track record of FMN and HFMP and their shared goal of making affordable and nutritious food available to Nigeria's population. The country and its food security agenda will benefit from both companies' focus on developing Nigeria's industrial capability, its agricultural value chain and specifically backward integration of the food industry.
Flour Mills of Nigeria Plc Assures Stakeholders That Acquisition of Majority Equity Interest In Honeywell Flour Mills Plc Not in Breach of Any Subsisting Order of Court
Flour Mills of Nigeria Plc ('FMN") wants to assure its stakeholders that the recent announcement by the Group to assume majority shareholder status of Honeywell Flour Mills Plc ("HFMP") on Monday 22Â°Â¢ of November, 2021, was made after carrying out necessary due diligence and obtaining appropriate legal guidance.
Consequently, FMN confirms that this agreement is not in breach of any subsisting Order of Court in matters relating to any third party. This further assurance has become necessary in view of the publication captioned "Ecobank Warns against Acquisition of Honeywell Flour Mills, Alleges Company Facing Winding Up Proceedings" whose actions are guided by global best practices, as we work diligently to maintain the Group's sterling reputation as one of Nigeria's leading and oldest agro-allied companies.
FMN in a Statement had earlier disclosed that it had reached an agreement for the proposed combination of FMN through its affiliates and HFMP, for a total enterprise value of NGN8O billion. It is expected that this combination will create a more resilient national champion in the Nigerian food industry, ensuring long-term job creation and preservation.
Greater benefits expected from the combination include enhanced efforts in attaining National food security objectives and leveraging opportunities stemming from the African Continental Free Trade Area (AfCFTA).