Corporate Event Consideration - Equity Derivatives Provision

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2002 ISDA Equity Derivatives Definitions
A Jolly Contrarian owner’s manual™

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Section 12.1(f)-(k) in a Nutshell™

Use at your own risk, campers!
12.1(f) “Share-for-Share” means
(i) for a Merger Event or Tender Offer, that the consideration for the relevant Shares consists (or, at the option of the holder of such Shares, will consist) solely of New Shares, and
(ii) a Reverse Merger.
12.1(g) “Share-for-Other” means a Merger Event or Tender Offer where the consideration is solely Other Consideration.
12.1(h) “Share-for-Combined” means a Merger Event or Tender Offer where the consideration is Combined Consideration.
12.1(i) “New Shares” means ordinary shares of any entity, that following the Merger Date or Tender Offer Date will be:
(i) publicly quoted, on a venue located in the same country as the Exchange (or, for European Union Exchanges, in the European Union) and
(ii) not subject to any exchange controls or trading limitations.
12.1(j) “Other Consideration” means consideration other than New Shares.
12.1(k) “Combined Consideration” means a combination of New Shares and Other Consideration.

Full text of Section 12.1(f)-(k)

12.1(f) “Share-for-Share” means (i) in respect of a Merger Event or Tender Offer, that the consideration for the relevant Shares consists (or, at the option of the holder of such Shares, will consist) solely of New Shares, and (ii) a Reverse Merger.
12.1(g) “Share-for-Other” means, in respect of a Merger Event or Tender Offer, that the consideration for the relevant Shares consists solely of Other Consideration.
12.1(h) “Share-for-Combined” means, in respect of a Merger Event or Tender Offer, that the consideration for the relevant Shares consists of Combined Consideration.
12.1(i) “New Shares” means ordinary or common shares, whether of the entity or person (other than the Issuer) involved in the Merger Event or the making of the Tender Offer or a third party, that are, or that as of the Merger Date or Tender Offer Date are promptly scheduled to be,
(i) publicly quoted, traded or listed on an exchange or quotation system located in the same country as the Exchange (or, where the Exchange is within the European Union, in any member state of the European Union) and
(ii) not subject to any currency exchange controls, trading restrictions or other trading limitations.
12.1(j) “Other Consideration” means any cash or securities (other than New Shares) or assets (whether of the entity or person (other than the Issuer) involved in the Merger Event or the making of the Tender Offer or a third party).
12.1(k) “Combined Consideration” means New Shares in combination with Other Consideration.


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Content and comparisons

Section 12.1. General Provisions Relating to Extraordinary Events

12.1(a). “Extraordinary Event”
12.1(b). “Merger Event”
12.1(c). “Merger Date”
12.1(d). “Tender Offer”
12.1(e). “Tender Offer Date”
12.1(f). “Share-for-Share”
12.1(g). “Share-for-Other”
12.1(h). “Share-for-Combined”
12.1(i). “New Shares”
12.1(j). “Other Consideration”
12.1(k). “Combined Consideration”
12.1(l). “Announcement Date”
12.1(m). “Implied Volatility”
12.1(n). “Affected Shares”
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Summary

Here we find the mechanical ways of describing the different ways a shareholder can be persuaded to part with its existing Shares and thereby agree to a Merger or accept a Tender Offer.

Our friends in the M&A advisory business — they are better paid and more impressively heeled than we — have no shortage of imaginative ways for investors to stump up the necessary to acquire new companies, or parts of old ones the current owner no longer wants, but basically they boil down to (i) being given New Shares (usually in the acquiror, or a “newco” it has established for the purpose), (ii) being paid cash (or given something else that isn’t New Shares, or (iii) a combination of the two.

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See also

Template:M sa Equity Derivatives 12.1(f)-(k)

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References

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