Indications emerged recently that Honeywell Flour mills’ initial public offer has not been greeted with the same enthusiasm witnessed in the primary market less than two years ago. Despite the fact that the company holds good prospects, sources have confirmed that investors are not too keen on the offer. This situation might not be unconnected with the extension of the offer that was originally billed to close on the 31st of December 2008, to 21st January 2009. The management of the company however stated shortly before the offer closed that they expect the offer, which closed yesterday to be “almost oversubscribed”.

Honeywell Flourmills, a member of the Honeywell group, commenced its initial public offer which is meant to pool about N18bn divided into 2,194,117,648 units of 50 kobo ordinary shares at N8.50 each, on 3rd December 2008. The company with over 13 years track record in the industry is one of the top four flour milling companies in Nigeria, having a subsidiary – Honeywell Super Fine Foods Ltd which it owns wholly and independently.

Obviously, market observers have attributed this indifference to the downturn in the Secondary Market. It would be recalled that Union Bank last year suspended its hybrid offer, a development some have opined is for similar reasons. But much more than this, others believe the timing of the offer is not the best, occurring during the festive period when usually, investors would sell to raise money for festivities and majority of obligations that shape up at the beginning of the year.

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