Dar es Salaam. Nation Media Group (NMG) yesterday announced it had bought back 17.1 million shares in its buyback offer which started in June this year.
The Nairobi Securities Exchange (NSE)-listed firm, which also trades at the Dar es Salaam Stock Exchange (DSE), said the acquired shares represent 8.25 percent of the company’s issued share capital.
Speaking during an interview with Nation’s online platform, NMG’s chief executive officer, Mr Stephen Gitagama, said the significant success rate exceeded the company’s expectations and it shows the financial market growth and maturity.
“It’s something that I would encourage investors to actually venture into because what it does is it sort of gives you an immediate uplift on the value of a share of the investment,” he said.
According to Mr Gitagama there was a lot of fear in the market regarding such an initiative, and whether or not it would succeed.
“We were not encouraged, in fact we were told that if you achieve five percent success you’ll be very lucky,” he said.
Mr Gitagama added, “From NMG experience and the success rate of 82 percent, I think it’s not a bad thing, it is a good idea, the market has actually told us.”
With the significant changes on media business brought by shift to digital and the woos of Covid-19 pandemic, the CEO said it was important for the group to find ways to boost investment value to shareholders.
“We realised our market capitalisation was significantly lower than the cash value which means the value of the firm has been significantly undervalued…therefore we decided that maybe it would be a good opportunity to give shareholders an option to have some value out of their investment,” he said.
Currently, NMG publishes the Daily Nation, Taifa Leo, Business Daily and The East African newspapers in Kenya. It also has investments in the broadcasting industry in the region with television and radio operations in Kenya and Uganda, in addition to several newspapers among them The Daily Monitor in Uganda, Mwananchi, Mwanaspoti and The Citizen in Tanzania.