Honeywell investors make N2.61bn in eight hours, as acquisition deal fails to save FMN from N3.89bn loss
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Shareholders of Honeywell Flour Mills Plc gained big from the disclosure of its deal with Flour Mills of Nigeria (FMN) on Monday, as its falling stock received a lifeline.
During the five days trading period last week, Honeywell Flour’s share depreciated by 0.29 percent, as the capital market priced the equity low from N3.4kobo per share to N3.39kobo.
However, following the deal with FMN, Honeywell Flour’s price movement took an upward swing of 9.73 percent in eight hours of trading on Monday, settling at N3.72kobo percent, from N3.39kobo – having lost 9.84 percent in eight weeks.
Honeywell shareholders made N2.61 billion from the surge in stock value, as total HFMP investors’ funds rose to N29.50 billion, from N26.88 billion, according to Ripples Nigeria analysis.
The story was, however, different on the side of the acquirer, as Flour Mills of Nigeria share traded flat on Monday at N29.25kobo, as the market remained cautious of the firm’s inorganic growth, which will attract HFMP’s liabilities (including debt owed).
Market sentiment towards FMN has been bearish in recent week, causing stakeholders to lose N3.89 billion to equity holders’ sell off, which dragged the stock value down by 3.14 percent in five days, from N30.2kobo per share to N29.25kobo.
The deal has failed to lift FMN shareholders from the N3.89 billion loss or sway positive sentiment towards its security, as the market continues to price the stock low which last posted it’s all-time-high this year at N35 per share in the last week of January.
The market swaying towards Honeywell Flour isn’t unexpected, as HFMP has enjoyed more bearish run in the Nigerian bourse year-to-date, appreciating by 181.8 percent to N3.72kobo from N1.32kobo.
Flour Mills of Nigeria price movement had soared 8.53 percent, picking up N2.3kobo along the way, as its market price rose from N26.95kobo to N29.25kobo per share year-to-date.
