NZME share buyback to commence in February 2022

MARKET ANNOUNCEMENT



17 December 2021



NZME share buyback to commence in February 2022
AUCKLAND, 17 December 2021: NZME Limited (NZX: NZM, ASX: NZM) (“NZME”) advises
that it will commence its on-market share buyback programme in late February 2022 following
the release of its FY21 annual results.
The buyback programme may run for up to twelve months, with that period ending on 16
December 2022. NZME will acquire shares through the NZX and ASX at the prevailing market
price from time to time during that period.
The buyback programme will be for up to 21,428,571 shares (representing approximately 11%
of NZME’s issued share capital as at 17 December 2021) for an aggregate purchase price of up
to NZD$30 million.
A copy of the disclosure document required by the Companies Act 1993 which will be sent to
shareholders today is attached to this announcement.
The number of shares purchased under the buyback programme from time to time will be
notified to the NZX and ASX on the business day following the date on which those shares are
bought back. Shares bought back will be cancelled upon acquisition, so the number of shares
on issue will reduce accordingly.
The buyback programme is not expected to continue during any closed period (as defined in
NZME’s Securities Trading Policy available on its website: www.nzme.co.nz). This includes, in
respect of NZME’s 2021 annual results, the period until the trading day after the NZME annual
results announcement is made and a similar period from 15 June 2022 until the trading day
after the release of its half year results in August 2022.
Throughout the buyback period, NZME will continue to assess market conditions, its prevailing
share price, available investment opportunities and all other relevant considerations. NZME
reserves the right to suspend without notice or terminate the buyback programme at any time.
ENDS
Authorised by the Board of NZME Limited.
For further information:
David Mackrell
Chief Financial Officer
T: +64 21 311 911
Email: david.mackrell@nzme.co.nz

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NZME Limited, 2 Graham Street, Auckland 1010 | Private Bag 92198, Victoria Street West, Auckland 1142 | +64 9 379 5050








DISCLOSURE DOCUMENT


17 December 2021



Dear Shareholder(s)

NZME Limited Share Buyback

On 16 November
2021
, NZME Limited (NZME, or the Company) announced that it intended to undertake
an on-market buyback of NZME ordinary shares (Shares) of up to $30 million to commence in early
2022.

A rigorous commercial discipline and a continual focus on managing the cost base as business activity
recovers has supported the continued strengthening of NZME’s balance sheet. Following the repayment
of debt over the last three years and the completion of the sale of GrabOne, NZME’s balance sheet is in
a strong position and net debt well below its target net debt range.
Based on these factors, the NZME board of directors (Board) determined that it would commence a
share buyback programme, with the most effective method being an on-market buyback of Shares. This
disclosure document explains the nature and implications of the buyback for NZME and its shareholders.

The Company will effect the buyback by purchasing Shares through the NZX and ASX order matching
markets at the prevailing market price from time to time, up to a maximum aggregate purchase price of
NZ$30 million (Buyback).

NZME will not begin the Buyback of Shares on-market until after its annual results announcement in
February 2022 (in line with NZME’s Securities Trading Policy). It will give shareholders at least three
business days’ notice prior to the commencement of the Buyback, through announcements on NZX and
ASX. No shareholder is obliged to sell any Shares to the Company during the Buyback, and NZME may
decide to suspend or terminate the Buyback programme at any time.
The Buyback programme may run for up to 12 months from the date this disclosure document is sent to
shareholders.
The Board believes that the Buyback is in the best interests of the Company and its shareholders.
Shareholders who wish to participate in the Buyback and sell their Shares should contact their broker.
If you do not wish to sell your Shares, you do not need to do anything.



Barbara Chapman
Independent Chairman

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SUMMARY OF THE BUYBACK
Terms of the Buyback
NZME is implementing a programme to buyback up to 21,428,571 Shares (representing approximately
11% of the Company’s issued capital as at 17 December 2021) for an aggregate purchase price of up
to NZ$30 million, pursuant to section 63 of the Companies Act 1993 (Companies Act).

Shares will be acquired by the Company by way of ongoing purchases on NZX and ASX. NZME will
pay the prevailing market price for the Shares at the time of purchase. Shares purchased by NZME
under the Buyback programme will be cancelled upon acquisition, and the number of Shares on issue
will reduce accordingly.

NZME will not begin the Buyback of Shares on-market until after its annual results announcement in
February 2022 (in line with NZME’s Securities Trading Policy). NZME will also give shareholders three
business days’ notice prior to the commencement of the Buyback programme through
announcements on NZX and ASX.

The number of Shares purchased under the Buyback will be notified to shareholders by way of an
announcement to NZX and ASX on the business day following the date on which NZME purchases
any Shares under the Buyback.

Throughout the Buyback, NZME will continue to assess market conditions, NZME’s prevailing Share
price, and all other relevant considerations. NZME is not obliged to make offers and reserves the right
to cease or suspend the Buyback programme at any time.

Rationale for the Buyback
The Board has decided to implement the on-market Buyback programme because:

The Company recently completed the sale of GrabOne, generating gross proceeds of $NZ17.5 million;
 Having regard to the Company’s target leverage ratio (which it currently remains below), and the
forecast cash flows for the next 12 months, the Board has determined that the Company is in a
position to distribute funds to shareholders;

 Participation in the Buyback programme is voluntary for shareholders; and

 An on-market buyback is a flexible and efficient means by which to return capital to shareholders.

Shareholders should seek their own tax advice before participating in the Buyback.
NZME has authorised the Buyback
In authorising the Buyback, the Board resolved and certified under the Companies Act
, that:


 The Buyback is in the best interests of NZME and its shareholders.
 The terms of the Buyback and the consideration offered for the Shares are fair and reasonable to NZME
and its shareholders.
 It is not aware of any information that will not be disclosed to shareholders prior to the offer being made
to shareholders:
 which is material to an assessment of the value of the Shares; and

 as a result of which the terms of the offer and consideration offered for the Shares are
unfair to shareholders accepting the offer.

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The Board has also certified that NZME will satisfy the solvency test set out in the Companies Act
immediately after the Buyback, based on reasonable grounds.

Procedural safeguards
In undertaking the Buyback, the Board will adopt certain procedural safeguards which are aimed at
ensuring that the Buyback does not distort the market price of Shares.

Shareholders must be fully informed
NZME will not purchase any Shares while it possesses information that is not generally available to the
market, and which, if it were so available, would have a material effect on the price of the Shares. NZME
will closely monitor compliance with its information disclosure obligations throughout the period of the
Buyback. If NZME becomes aware of such price sensitive information, it will cease acquiring Shares
until the information is publicly disclosed or ceases to be materially price sensitive.

Text of Board Resolutions
NZME is implementing a programme to buyback up to 21,428,571 Shares (representing approximately
11% of the Company’s issued capital as at 17 December 2021) for an aggregate purchase price of up
to NZ$30 million.

To initiate the Buyback, the Board has resolved (amongst other things) that:
(1) In accordance with sections 52 and 63 of the Companies Act 1993, the Company make on-market
offers on NZX and / or ASX to all of the Company’s shareholders to acquire no more than
21,428,571 shares in the Company for an aggregate price of no more than NZ$30 million.

(2) The proposed on-market acquisition of the shares is in the best interests of the Company and its
shareholders.

(3) The terms of the offer and the consideration offered for the Company’s shares are fair and
reasonable to the Company and its shareholders.

(4) The Board is not aware of any information that will not be disclosed to shareholders prior to the offer
being made to shareholders:

(a) which is material to an assessment of the value of the shares; and

(b)
as a result of which, the terms of the offer and consideration offered for the shares are unfair to
shareholders accepting the offer.
(5) The directors’ conclusions set out in resolutions (2) to (4) above are based on the following:
(a)
having regard to the Company’s target leverage ratio (which it currently remains below), expected
debt repayments and forecast cash flows over the next 12 months, and following the completion of
the GrabOne sale, the Company is in a position to distribute up to NZ$30 million to shareholders;
(b)
financial flexibility will still be maintained in the Company’s balance sheet following the proposed
share buyback programme due to the Company’s expected cash flows and prudent capital
structure;
(c) the terms of the proposed share buyback programme are acceptable to the directors;

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(d) the purchase price payable by the Company for shares under the share buyback programme
will be equivalent to the market price of the Company’s shares at the time of relevant
acquisition, and the terms are therefore “arm’s length” and are fair both from the perspective
of shareholders who choose to sell and those who continue to hold their shares;

(e) shareholders have the choice of whether or not to participate in the share buyback programme
and can seek independent advice as to whether to sell some or all of their shares, or continue
to hold all of their shares;

(f) the tax consequences for shareholders participating in the share buyback programme are
unlikely to be different from ordinary trading activity, therefore representing a tax effective
means of managing the Company’s capital; and

(g) the Company has in place reviews and procedures to ensure that it does not acquire shares
during the period when material price sensitive information is known to the Company but is not
available to shareholders.

(6) The Board is satisfied that the Company will, immediately after completion of the share buyback
programme, satisfy the solvency test as set out in section 4 of the Companies Act 1993 (as modified
by section 52(4) of the Companies Act 1993).

(7) Any one of the directors of the Company, the CEO or the CFO be and is hereby authorised to:
(a) enter into, execute and deliver on behalf of the Company any deeds, agreements, instruments,
announcements, certificates, notices or other documentation (Documents) contemplated by,
or considered necessary or desirable under or in connection with the share buyback
programme, in such offer as they may approve (execution by or on behalf of the Company to
be conclusive evidence of such approval); and
(b) take such other actions on behalf of the Company as may be necessary or desirable under or
in connection with the share buyback programme and/or the Documents.
(8) Upon completion of the acquisition of shares by the Company, the shares will be cancelled and the
share register of the Company updated accordingly.

Directors’ interests
The Buyback offer is made to all shareholders of NZME. At the date of this disclosure document
(17 December 2021), the directors of NZME have the following relevant interests in Shares subject to
the Buyback offer:
Director Number of
Shares
Nature of relevant interest
Barbara Chapman

73,000

Beneficial interest in shares held by an
associated person

Carol Campbell

150,000
Registered holder and beneficial owner
David Gibson

50,000
Registered holder and beneficial owner
Guy Horrocks

0

Not applicable
Sussan Turner

0
Not applicable

This disclosure document is provided pursuant to section 63(6) of the Companies Act and complies with
section 64 of the Companies Act.