Nation Media Group (NMG) Board of Directors has recommended that the firm’s shareholders effect the Share Buyback plan by way of open market purchases through on the Nairobi Securities Exchange (NSE).
This is subject to shareholder approval at the next Annual General Meeting(AGM), to be held virtually at 3.00 pm on Friday, June 25th 2021.
On February 25th 2021, the media house board of directors first announced the share buyback plan. It proposed buying back up to 10.0% of the issued shares (about 20,739,652 shares) subject to regulatory and shareholder approval.
A Share Buyback is defined as a transaction in which a company repurchases its shares.
The repurchased shares are either classified as treasury stock/ treasury shares or are cancelled. These shares no longer get dividends, voting rights and are not included in calculating earnings per share (EPS).
Nation Media Group maximum share buyback price
The Nation Media Group Board recommends a minimum price equivalent to the par value of an ordinary share and a maximum buyback price of KSh 25 per ordinary share.
Any ordinary shares acquired by the Company after the Buyback will be held as Treasury Shares.
A shareholder circular approved by the Capital Markets Authority and the firm’s board, containing full details of the Buyback, will be available on the NMG website from May 31st, 2021.
It is expected that the Buyback offer will open simultaneously with the opening of trade at the NSE on June 28th, 2021. The Buyback offer will close once the 10% issued capital has been bought or on September 24th 2021, whichever comes first.
A firm can buy back its shares to support the price – for instance, if it believes it is undervalued.
It can also buy back to distribute cash to shareholders, attain tax efficiency, or absorb increases in shares outstanding from previous employee stock options.
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