GEN - FTSE/JSE Africa Index Series - FTSE Ground Rules - Mandatory Offers
JSE
GEN
GEN - FTSE/JSE Africa Index Series - FTSE Ground Rules - Mandatory Offers
FTSE Ground Rules - Mandatory Offers
FTSE/JSE Africa Index Series
9 November 2011
In order to provide further clarity on the treatment of Mandatory Offers, please
note:
A mandatory offer is a type of corporate action where a percentage of shares are
expropriated from all shareholders at a pre-determined price on a given date.
Mandatory offers are unique since the capital structure of the company remains
unchanged, yet the tracker of a share portfolio will make a profit/loss,
depending on the pre-determined expropriation price as compared to the market
price.
A mandatory offer is implemented as part of a scheme of arrangement. At least
75% of shareholders must agree to this at a shareholders meeting. This fixed
price is normally different to the market price at the time of implementation.
FTSE/JSE will adjust for mandatory offers according to the formula below:
* the expected opening share price on the ex date will be:
Expected Open = (Closing Price - (Offer percentage * Offer Price) ) / (1 - Offer
Percentage)
* the price adjustment will be Expected Open - Closing price
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Date: 10/11/2011 07:05:01 Produced by the JSE SENS Department.
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