Nation Media Group (NMG) is set to begin Kenya’s first share buyback program at the Nairobi Securities Exchange(NSE) today.
A share repurchase or buyback refers to when the management of a public company decides to buy back company shares that were previously sold to the public.
The media house had earlier released a circular on May 29th 2021, where they announced plans of buying an average of Kes 20.7 million of issued shares. Shareholders approved the buyback plan in their recent meeting on 25th June 2021, where they approved the buyback of up to 10% of the media group’s issued and paid-up share capital.
Nation Media Group said they are targeting to buy back 10% of their issued shares between 28th June 2021 and September 24th 2021, with the buyback price set at Kes 25 per ordinary share.
The share buyback was attributed to the shares of the media house being undervalued where the market does not reflect the company’s value. However, following the announcement of the share buyback, the company’s share price surged almost 30 %.
The buyback is expected to close when the firm completes buying up to 10% of its issued share capital or at 3.00 pm on September 24th, 2021.
Nation Media Group Plc opens 8.46% higher on the Nairobi Securities Exchange at Kes 25.00.
During the AGM on Friday, NMG shareholders approved the share buyback which is set to begin today.
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According to notice and circular to nation media group shareholders, the maximum number of ordinary shares that may be acquired under the buyback plan is 20,739,652 representing approximately 10% of the firm’s issued share capital.
Any ordinary shares acquired through the buyback plan will be held at treasury shares, said NMG in a public announcement.
The share buyback by Nation Media Group is expected to pave the way for other listed companies to buy back their shares.
