How are options typically adjusted in the case of a merger where an election is involved?
An option’s deliverable in the case of an election merger is usually adjusted based on the merger consideration, which accrues to non-electing shareholders. If call option holders do not wish to receive the non-electing consideration after the contract adjustment, they must exercise in advance of the election deadline. And as shareholders, they must elect pursuant to the election procedures described in the proxy statement/prospectus. To view information on past option adjustments due to election mergers, visit the Options Clearing Corporation’s website, www.optionsclearing.com. Click on the “Information Memos” link located in the “Important Notices” section on OCC’s homepage. In the “Search For” box enter keyword “election merger.
An option’s deliverable in the case of an election merger is usually adjusted based on the merger consideration, which accrues to non-electing shareholders. If call option holders do not wish to receive the non-electing consideration after the contract adjustment, they must exercise in advance of the election deadline. And as shareholders, they must elect pursuant to the election procedures described in the proxy statement/prospectus. To view information on past option adjustments due to election mergers, visit the Options Clearing Corporation’s website, www.optionsclearing.com. Click on the “Information Memos” link located in the “Important Notices” section on OCC’s homepage.
