Nation Media Group is considering to buy back 10% of its 18,854,229 ordinary shares, disclosed the Board of Directors on Thursday, 25th February 2021.
The Board in a notice said the proposal was in line with the Capital Markets Authority (CMA) regulations which require a company to inform investors about a plan to buy back shares. A buyback, also known as a share repurchase, is when a company buys its own outstanding shares to reduce the number of shares available in the open market.
Investors have responded positively to the announcement with NMG’s share price gaining 9.33% at Ksh 14.65 per share compared to its Wednesday Ksh 13.40 per share. However, the NMG has not announced at what price they will buy back the shares.
Alykhan Satchu, CEO Rich Management said, “It’s a positive signal and says Management believes shares are too cheap,” adding that “Frankly it was long overdue at a market Cap of around $24m even with the Schumpeter media-level disruption I think it was just too egregious. They are showing they want more skin in the game at this level.”