In a strategic move targeted at maximising returns and expanding its investment portfolio, Honeywell Group, a renowned Nigerian investment company, has stated it is bullish about the value generation potential of its recent investment in FBN Holdings, one of Nigeria’s largest financial services groups.
Last week, Barbican Capital Limited revealed it had acquired an aggregate of 4.77 billion units of FBN Holdings’ shares. FBN Holdings confirmed the acquisition, affirming that the equity stake of Barbican Capital Limited in the Company had become 13.3%.
According to the letter by HGL Managing Director Obafemi Otudeko, the decision to invest in FBN Holdings is part of Honeywell Group’s ongoing efforts to diversify its business interests while capitalising on promising opportunities in Nigeria’s thriving financial sector for the benefit of its shareholders.
“HGL has a deep history of over five decades, of building, scaling, and investing in some of Nigeria’s most successful businesses. Key milestone investments include GSM telecommunications, through what is widely known today as Airtel Nigeria, Fan Milk Nigeria Plc, and Honeywell Flour Mills Plc, one of Nigeria’s leading food producing companies, feeding over four million households yearly,” he said.
The investment company’s majority stake in Nigeria’s premier banking institution is widely predicted to provide even greater value for its stakeholders, as highlighted in recent developments. For instance, on the back of the announcement of Barbican Capital Limited as a majority investor in FBN Holdings, the financial company’s market capitalisation experienced a sharp increase from N612 billion in the preceding week to over N728 billion when its stock price closed last Friday.
Notwithstanding ongoing distractions around the acquisition process, the revelation of HGL’s FBN Holdings share acquisition is expected to further propel the banking institution’s share price to an unprecedented peak in its history as a Holding company, after soaring to a notable 52-week high of N22.3 on Monday. This surge in market price is just as HGL’s leadership earnestly outlines a comprehensive approach to ensure the investment’s future success.
The Central Bank is expected to undertake a thorough screening process of Barbican Capital in accordance with its vetting rules, with HGL indicating its commitment to due process and alignment to regulatory oversight.
While he has called for patience, Obafemi Otudeko believes in the investment’s potential to unlock substantial value for both the HGL and FBN Holdings’ stakeholders, as well as contribute to the growth and stability of Nigeria’s financial services sector.
He says in the follow-up letter to FBN Holdings on the share acquisition, “Honeywell Group Limited (HGL) is a dedicated long-term investor committed to investing in great businesses with immense growth potential. Our approach involves working closely with stakeholders with a shared vision to foster the creation and enhancement of value for all. We understand that this requires time and patience. Our intention is to follow this approach in respect of our investment in FBN Holdings, an iconic institution which we greatly respect and with which we have a deep and long-term relationship, as customers, investors, and board members.”
Market analysts have commended HGL’s proactive approach since the majority share acquisition revelation, considering it a positive step towards strengthening investor and shareholder confidence. As the Nigerian financial sector continues to evolve, many experts are optimistic that the investment signals a new chapter to be characterised by accelerated growth and increased innovation.
