Nation Media Group's (NMG) share price has gained 28.2 percent to Sh20 in one month on a new stock buyback plan that offers investors a chance to cash in on their investment.
The NMG board on May 25 put up a notice announcing that it had resolved to propose a second share buyback following that of 2021 in which it acquired 17.1 million shares from the market.
The announcement has seen the share price rise from the Sh15.60 it was trading at on May 24 to Sh20 at the close of trading on the Nairobi Securities Exchange (NSE) on Tuesday.
The NMG board on Tuesday morning issued another notice indicating that it will be seeking shareholder approval during the annual general meeting set for June 30 to effect the share buyback by way of open market purchase.
The new stock buyback programme will see NMG acquire up to 19.02 million ordinary shares which represent 10 percent of the current issued and paid-up share capital.
“The board recommends a minimum price equivalent to the par value of an ordinary share and a maximum buyback price of Sh20 per ordinary share, which price is subject to shareholder approval,” said NMG in a public notice.
A share buyback is a corporate action in which a company buys back its shares from the existing shareholders through the open market.
NMG expects the new buyback offer, if approved by shareholders, to open simultaneously with the opening of trade at the NSE on Monday, July 3, 2023.
The proposed buyback will close on the earlier of the company buying up to 10 per cent of the total issued shares or at 3pm Tuesday, July 2, 2024.
NMG between June 28, 2021 and September 24, 2021 ran the first share buyback programme that gave shareholders a chance to sell up to 20.7 million shares they held in the media house at Sh25 per piece.
The share buyback sought to address undervaluation and also to facilitate shareholders who sought to liquidate part or all their shares.
NMG acquired 17.1 million shares at the completion of the programme, representing an 82.45 percent performance rate. The ordinary shares acquired by the company are now held as treasury shares.
Centum Investment Company Plc became the second firm to launch a share repurchase programme which is ongoing.