Greek-American investor wants to take over Flour Mills of Nigeria

The N70 per share the acquirer is offering is 26.2 per cent higher than the price at which Flour Mills of Nigeria opened for trade on Tuesday.

The full ownership and control of the country’s premier miller, Flour Mills of Nigeria Plc, could be passed on to John Coumantaros, the Greek-American heir of George Coumantaros, the miller’s deceased founder.

In 1963, the older Coumantaros gave the entity a go as a mono-product business, building it from a modest factory on a Lagos seaport into a group worth N2.3 trillion in annual turnover.

That feat of revenue generation, unmatched by any Nigerian bank or banking group except Access Holdings, underscores the manufacturing behemoth the business just as old as Nigeria’s independence has transformed into in a little over six decades.

The late Coumantaros, a yachtsman from Athens who sowed the seed of the empire which blossomed over the years to stretch inwards to other parts of West Africa, notably Liberia, imagined wheat milling for a start.

Today, its scope of activity is much more complex and diversified. The company has evolved and branched out into different operations within and outside food processing including logistics, port operations, real estate, power generation and agribusiness.

Assets now total N1.48 trillion, but the valuation even touched a slightly higher level earlier in the year.

Excelsior Shipping Company, which the latest annual report of Flour Mills of Nigeria says is the manufacturer’s parent company, is an offshore trust registered in Liberia.

The entity has little or no online presence, no known website and none of its operations and activities are visible on the internet.

Liberia, as a tax haven (a country whose laws shelter individuals and businesses from paying tax on income earned abroad), was marked for sanctions by the Organisation for Economic Cooperation and Development in 2000 and has been pinpointed by the Tax Justice Network as accounting for 0.42 per cent of the world’s corporate tax abuse risks.

Established by Mr Coumantaros (now deceased), Excelsior Shipping Company, which has a controlling stake of 63.3 per cent in Flour Mills of Nigeria, now has John Coumantaros, the son of its owner, as the man in charge.

The younger Coumantaros has also been chairman of the food company since 2014.

Takeover details

Flour Mills of Nigeria wrote the Nigerian Exchange on Tuesday to communicate the trust’s decision.

The trust on Tuesday wrote the Nigerian Exchange, where Flour Mills of Nigeria’s shares are listed, to communicate its move to buy out other shareholders – individual and institutional investors who together hold the company’s 37.7 per cent minority shareholding.

Flour Mills said a key approval from the Securities and Exchange Commission, the stock market regulator, is in place for the transaction to proceed.

More importantly, the determinant of the direction the deal will head ultimately is a statutory meeting of the company and its shareholders fixed for 14 November, where minority shareholders will decide to sell or hold on to their interests.

The N70 per share the acquirer is offering is 26.2 per cent higher than the price at which Flour Mills of Nigeria opened for trade on Tuesday. It implies Excelsior Shipping Company is putting forward more than N105 billion to take the company private.

“The Scheme is also subject to the approval of the shareholders of Flour Mills at the Court-Ordered Meeting as well as the sanction of the Federal High Court,” the food company said in the filing.

Flour Mills is the majority owner of Northern Nigerian Flour Mills, a Lagos-quoted miller with total assets of N21.6 billion.

It ranks alongside Dangote Sugar and BUA Foods as Nigeria’s top sugar makers and is the producer of TopFeeds and the popular Golden Penny products, which include edible oils, bread spread and sugar.