Inside Story: Honeywell Group Increases Stake As FBN Holdings Largest Shareholder

Nigerian investment company, Honeywell Group, has taken another significant step towards value generation by acquiring additional shares in FBN Holdings, the parent company of Nigeria’s oldest bank.

Undisclosed brokers have confirmed that as of the close of the market, the company increased its stake to an impressive 15.1%.

In what analysts have termed the largest single largest transaction in 2023, Honeywell Group acquired over 4.7 billion additional shares on Thursday, July 6, 2023. In a statement from the company, it mentioned that it had ‘notified FBN Holdings Plc (FBN) and regulatory authorities of the acquisition of 4,770,269,843 shares of FBN by its affiliate company, Barbican Capital Limited. This purchase is in addition to previously disclosed interests by HGL’s affiliates.”

Sources have now confirmed that the 50-year-old company has purchased shares worth over N105 billion as at today. This was done through negotiated deals.

FBNH’s Company Secretary, Adewale L.O Arogundade has since confirmed Honeywell Group’s purchase of the 4.7 billion units of shares in a notification to the NGX: “This is to inform the public and our stakeholders that the Company received a notification dated July 7, 2023 from Honeywell Group Limited that its affiliate, Barbican Capital Limited has acquired an aggregate of 4,770,269,843 units of shares from the Company’s issued share capital of 35,895,292,791, as at the above referenced date.”

Barbican Capital Limited owned by Obafemi Otudeko, the Managing Director of Honeywell Group and Foluke Oyeleye, has also been confirmed as the company behind the purchase.

The Managing Director, HGL in a letter to the Chairman of FBNH, published by Thisday on July 10, 2023, stated that: “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.”

Obafemi Otudeko, Managing Director of Honeywell Group is a seasoned investment professional that has led many of HGL’s strategic investments and transactions. Including the group’s multi-million dollar divestment from Airtel Nigeria to Bharti Airtel and the recently completed sale of Honeywell Flour Mills to Flour Mills of Nigeria, the biggest capital market transaction of 2022.  

With over 25 years’ experience he is a board operator who has sat on the boards of some of Nigeria’s most impactful companies including Airtel Nigeria, First Bank of Nigeria Ltd and Honeywell Flour Mills Plc. A Fellow of the Institute of Chartered Accountants of Nigeria, he has deep financial services pedigree working across various sectors with a focus on corporate finance and value creation through investments.

In addition to his responsibilities at HGL, he is a non-executive director of Anchorage Leisures Ltd. He previously served as a non-executive director of Airtel Nigeria, First Bank of Nigeria Ltd and Honeywell Flour Mills Plc. Obafemi began his professional training at PricewaterhouseCoopers, where he led and managed assignments providing assurance, risk management, internal audit, and business advisory services for clients across various sectors, before specialising in financial services.

Honeywell Group, a 50-year-old company has been a shareholder in FBNH for over 30 years. In Obafemi Otudeko’s letter to the FBNH Chairman, he also spoke to the Honeywell Group’s portfolio, sharing the over 150-year combined experience of its executives: “I lead a diverse senior management team with over 150 years combined experience in various professional qualifications and specialties.

“This international and gender-balanced team comprises over 60 years of active investment banking experience with leading international firms including Dresdner Kleinwort Wasserstein, Standard Chartered, Standard Bank and Deutsche Bank, 50 years of Honeywell Group Limited professional accounting experience (including with PricewaterhouseCoopers and Baker Tilly), and 60 years of legal experience (including with Bentley Edu & Co, Aelex, and Banwo and Ighodalo). We bring this breadth and depth of experience to bear in our investment activities.”

Analysts are looking to see the continued increase in the Bank’s share value and are intrigued by the turn of events. Sources say that FBN will respond to the letter or a meeting will be set up with the team to discuss its 15% stake and future plans for the Bank and its holding company.