The media house, which embarked on a digital transformation journey with the recent launch of its flagship digital brand, Nation.Africa, will start buying the shares.
This makes NMG the first company at the Nairobi bourse to launch a share buyback following changes to the company law in 2015.
Nation Media Group #ticker:NMG (NMG) has received regulatory approval to acquire 10 percent of its own shares from shareholders in a stock buyback plan that offers investors a chance to cash in on their investments.
The media house, which embarked on a digital transformation journey with the recent launch of its flagship digital brand, Nation.Africa, will start buying the shares from June 28 at a maximum price of Sh25 a piece, subject to approval by shareholders at the Annual General Meeting to be held on 25 June 2021.
This makes NMG the first company at the Nairobi bourse to launch a share buyback following changes to the company law in 2015 that allowed firms to acquire their own shares.
“The Buyback offer is expected to close on the earlier of the company buying up to 10 percent of its issued share capital or on Friday, 24 September, 2021,” NMG said in a notice.
“The share buyback seeks to offer the shareholders an alternative option to realise value from their investment.”
A share buyback is one of the ways for a company to return funds to shareholders, effectively reducing the number of issued shares.
NMG declared a bonus share of one for every 10 ordinary shares held last year and the share buyback gives shareholders an opportunity to cash out on their investments.
Total comprehensive income for the year ended December 2020 stood at Sh135.5 million, marking a strong recovery from Sh352.7 million loss the listed media house posted at half year.
The company had Sh2.9 billion in cash and cash equivalents at close of the year.
The curbs on movements and stay-at-home push in the wake of Covid-19 scourge affected newspapers distribution, but growth in e-paper subscriptions partially mitigated the drop in hard copy sales.
East Africa’s largest media company has rolled out a two-pronged approach to sustain growth that includes renewed digital presence and a revamp of its print business with the recent facelift of the Daily Nation.
With the launch of Nation.Africa, NMG will leverage on its extensive digital footprint of over 40 million visitors per month to monetise the online audiences into sustainable revenue streams.
Four months after the introduction of its metered paywall, the NMG hit a new milestone, as total digital subscription rose to more than 65,000 subscribers.
The firm’s share price has gained 7.14 percent over the three months to Sh17.25 per share.
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