Nation Media Group (NSE:NMG) shareholders on Friday approved the payment of Sh285.44 million final dividend for the financial year ended December 2022 and the start of a second share buyback programme on Monday.
The approval will see shareholders get Sh1.50 as dividend for each share held, with the payment set for on or about July 28 while the share buyback programme will start this Monday morning simultaneously with the opening of trade at the Nairobi Securities Exchange (NSE).
The NMG board had on May 25 put up a notice announcing that it had resolved to propose a second share buyback to shareholders following that of 2021 in which it acquired 17.1 million shares from the market.
The board’s proposal was endorsed by shareholders on Friday during the 60th annual general meeting that was held virtually to allow shareholders in different geographical regions to attend.
The approval by shareholders clears the way for NMG to effect the share buyback by way of open market purchase, effective this Monday morning at the NSE.
The share buyback will close earlier with the company buying up to 10 per cent of the total issued shares or at 3pm Tuesday, July 2, 2024.
The new stock buyback programme, which follows that of 2021, will see NMG acquire up to 19.03 million ordinary shares which represents 10 percent of the current issued and paid-up share capital.
The board recommended a minimum price equivalent to the par value of an ordinary share and a maximum buyback price of Sh20 per ordinary share, which shareholders also endorsed.
A share buyback is a corporate action in which a company buys back its shares from the existing shareholders, usually at a price higher than the market price.
NMG chairman Wilfred Kiboro said the new stock buyback comes in an environment where a section of stakeholders has argued the price of NMG shares is not reflective enough of the value of the group.
“The share buyback is partly aimed at addressing the undervaluation and also to facilitate shareholders who wish to liquidate their investments at a fair value,” said Dr Kiboro.
The NMG share price has rallied from the Sh15.60 it was trading at on May 24 before the share buyback announcement but has rallied over time, hitting a high of Sh20.85 on May 30. It closed Friday trading at Sh19.05.
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.
Shareholders sold 17.1 million shares at the completion of the programme, representing an 82.25 percent performance. The ordinary shares acquired by the company are now held as treasury shares.
