A distribution of subsidiary stock to the shareholders of the parent corporation without having cost to the shareholder of the parent issue whereby the shareholders are offered choices regarding the resultant stock.
Voluntary Events
AGM / EGM – proxy voting on shareholders meetings
Every publicly traded company has an annual general meeting where management presents several decisions that need shareholder approval. The approval is given by means of voting for or against each decision. Shareholders may attend the meeting in person or vote by proxy - electronically or by mail via their brokers and custodian.
Buy-back program (BIDS) / Repurchase Offer
Offer by the issuing company to existing shareholders to repurchase the company’s own shares or other securities convertible into shares. This results in a reduction in the number of outstanding shares
Dividend Reinvestment Plan (DRIP)
Similar to cash stock option. In this case however, the company first pays the cash dividend after which shareholders are offered the possibility to reinvest the cash dividend in new shares.
Dutch Auction
A Dutch Auction Offer specifies a price range within which a fixed number of shares will ultimately be purchased. Shareholders are asked to submit instructions as to what price they are willing to sell. Once all instructions have been counted, the shares of the shareholders who voted to sell at the lowest prices will be bought untill either the fixed number of shares is reached or the upper limit of the price range is reached.
Odd lot Tender
In case shares are tradeable in so called board lots of for example 100 shares only and a shareholder has an amount of shares that is not a multiple of the board lot, then this additional quantity is called odd lot. An odd lot tender is an offer to shareholders with odd lots to sell the shares in the odd lot at a given price. So for example, if the board lot is 100 and a shareholder holds 150 shares, an odd lot tender will give the shareholder to dispose of 50 shares at a given price. The board lot of 100 will still be tradable as normal.
Rights Auction
Rights to buy new shares are being auctioned - shareholders who submit the highest prices at which they are willing to buy new shares will get the new shares.
Rights Issue
Rights are issued to entitled shareholders of the underlying stock. They allow the rights holder to subscribe to additional shares of either the same stock or another stock or convertible bond, at the predetermined rate/ratio and price (usually at a discount to the market rate). Rights are normally tradable and can be sold/bought in the market, exercised or lapsed.
For more detailed info on rights issues check: www.rightsissue.net.
Subscription Offer
Offer to existing shareholders to subscribe to new stock or convertible bonds.
Tender Offer / Take Over
Offer from Company A to shareholders of Company B to tender their shares to company A at a given price. The given price can be payable in cash only, stock in Company B only or a combination of cash and stock.
Voluntary Exchange / Optional Conversion
Offer to exchange shares of security A into cash or into Security B
BONDS:
Conversion of convertible bonds
Convertible bonds are being converted in the underlying shares
Coupon Payment - interest payment
The issuer of the bond pays interst according to the terms and conditions of the bond, ie interest rate and intervals of payment.
Early Redemption
The issuer of the bond repays the nominal prior to the maturity date of the bond, normally with accrued interest.
Lottery (also known as a drawing)
The issuer redeems selected holdings before the maturity date of the bond (early redemption).
Partial Redemption
The issuer of the bond repays part of the nominal prior to maturity, normally with accrued interest.
Final Redemption
The issuer of the bond repays the nominal of the bond, normally with accrued interest.
DERIVATIVES:
Optional Put
An event in which the holder of the put options has the option to exercise the put option in order to sell the underlying security at a given price.
Warrant Exercise
An event in which the holder of the warrants has the option to exercise the warrant in accordance with the terms and conditions of the warrant.
Warrant Expiry
An event that notifies the holder of the warrant that the warrant is about to expire and the holder of the warrant is given the option to exercise the warrant.
Warrant Issue
Per share an amount of warrants is issued according to a specific ratio. The warrant can entitle to sell or buy the underlying security at a given price within a given timeframe.
