Jubilee Holdings chairman Nizar Juma (seated) with the board of directors during the insurer’s 83rd AGM in Nairobi on June 29, 2021. PHOTO | DIANA NGILA | NMG Jubilee Holdings shareholders on Tuesday approved amendments to the company’s articles of association to enable it to buy back its own shares when trading below its fair value.
The insurer had asked shareholders to amend its articles of association to authorise the unique transactions in the future.
“When we want to use this option, we will come back to shareholders to get approval before exercising this option,” said Jubilee chairman c.
Stock buybacks typically involve the repurchasing of shares by the company that issued them. It occurs when the issuing company pays shareholders the market value per share and re-absorbs that portion of its ownership that was previously distributed among public and private investors.
Share buybacks are common in the Western world where they are ideally implemented when companies believe their stock is trading at a major discount to the intrinsic value.
These transactions have the effect of forcing share prices up besides increasing the stake of continuing shareholders. Companies typically buy back shares when they have more cash than they need to fund their day-to-day operations.
Tuesday’s nod by shareholders makes Jubilee the second Nairobi Securities Exchange (NSE)-listed firm to allow for share buybacks.
Nation Media Group (NMG) is the first company at the NSE to launch a share buyback following changes to the Companies Act in 2015 that allowed firms to acquire their own shares.
The NMG on Monday kicked off the buyback of up to 10 percent of its issued shares in Kenya’s first-ever public stock buyback programme, offering investors a chance to cash out. The offer will close on September 24 or earlier if the company acquires 20,739,652 shares ahead of the deadline.
The media house started buying the shares through the NSE at Sh25 a piece following shareholder nod at the annual general meeting on Friday.
Jubilee has since listing on the NSE in 1984 depended on dividends to pump money to shareholders.The underwriter has consistently paid dividends for the last 36 years — either growing or maintaining the same level year on year.Jubilee shareholders on Tuesday endorsed a Sh652.3 million dividend payout, paving the way for investors to receive Sh579.78 million final dividends by July 26.Jubilee had already paid an interim dividend of Sh72.47 million. The payout is on the financial year ended December when […]