Character Group PLC (AIM:CCT) said it will return around £13.5mln to its shareholders via a tender offer priced at 630p per share.
The buyback is equivalent to 10% of the company's share capital, the distributor of Peppa Pig, Scooby-Doo and Fireman Sam toys said in a statement.
The tender price is at an 8.4% premium to the average middle market closing share price in the 60 trading days ended 27 January 2022.
In a trading update earlier this month, Character Group said it expects to meet current market forecasts for the year to end-August 2022.
The company has been significantly impacted by the global supply chain problems, with delays at ports, shipping and container shortages, rising freight rates and increased inland transportation costs hitting profitability.