tag:blogger.com,1999:blog-9026484337051027793.post1521628266596648624..comments2008-11-19T09:37:37.790-05:00Andyhttp://www.blogger.com/profile/14309605333128481208andy@savingtoinvest.comBlogger10125tag:blogger.com,1999:blog-9026484337051027793.post-27403065938493376472008-11-19T09:37:00.000-05:002008-11-19T09:37:00.000-05:00Good question. I did a search on google and found that this document provides some useful information on what happens to options in a takeover:<BR/><BR/>http://www.optionsclearing.com/initiatives/osi_steering/contract_adjustments_and_the_osi_102208.pdf<BR/><BR/>Another good one to read is: http://optionseducation.org/help/faq/splits.jsp<BR/><BR/>Basically, When there is a merger or takeover, options on the stock of the acquired company are adjusted according to the terms of the deal. With a call option, your right to buy the stock is converted to aright to buy a corresponding quantity of whatever shareholders receive<BR/>for their stock.<BR/><BR/>Say you have options to buy ABC stock and XYZ acquires ABC. Whatever deal ABC's shareholders get carries over to your options. For example, if you had an option to buy a share of ABC for $1 and the takeover deal was that every ABC share is exchanged for two shares of XYZ, after the takeover, you would have an option to buy two shares of XYZ for $1.<BR/><BR/>If the transaction between the companies is more complicated (e.g., a combination of stock and cash), what happens to the option will be correspondingly more complicated. But in any case, the exchange where the option is traded should publish what is going to happen to the<BR/>options before it actually happens.<BR/><BR/>source : http://answers.google.com/answers/threadview/id/455330.html<BR/><BR/><BR/>In regards to BUD, I think you will get some more information on thier investor page when it is updated.Andyhttp://www.blogger.com/profile/14309605333128481208noreply@blogger.comtag:blogger.com,1999:blog-9026484337051027793.post-29425933390540452972008-11-18T13:26:00.000-05:002008-11-18T13:26:00.000-05:00ok, i still own some of these options but they seem to have stopped trading. how do i now sell them? does this mean i will have to take delivery of the bud shares and sell them to inbev?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-9026484337051027793.post-58946024301641653092008-11-18T10:59:00.000-05:002008-11-18T10:59:00.000-05:00I hope folks made money from this deal which just closed per this news filing: <BR/><BR/>Belgium's InBev NV (INTB.BR) completed its acquisition of U.S. brewer Anheuser-Busch Cos Inc (BUD)making it the world's largest brewer and sending its shares up 2.8 percent.<BR/><BR/>As of Tuesday, the maker of Stella Artois and Beck's will be known as Anheuser-Busch InBev. Its shares will trade on the Euronext Brussels stock exchange under a new symbol, ABI, starting Nov. 20.<BR/><BR/>Shares of Anheuser-Busch, maker of Budweiser and Michelob, have ceased trading on the New York Stock Exchange pending their acquisition by InBev for $70 per share, or a total of $52 billion.<BR/><BR/>The St. Louis-based brewer, which accepted a sweetened takeover offer from InBev in July, will retain its current headquarters in St. Louis, which will become the North American headquarters for the combined company.<BR/><BR/>InBev financed its takeover with a $45 billion syndicated loan whose future was called into question once the global financial crisis erupted in September, effectively slamming the brakes on credit.Andyhttp://www.blogger.com/profile/14309605333128481208noreply@blogger.comtag:blogger.com,1999:blog-9026484337051027793.post-44273613047302145782008-11-14T17:40:00.000-05:002008-11-14T17:40:00.000-05:00Fair enough, thanks for the great tip!Raynhttp://www.blogger.com/profile/14088048313959635426noreply@blogger.comtag:blogger.com,1999:blog-9026484337051027793.post-34745166434617576582008-11-14T15:41:00.000-05:002008-11-14T15:41:00.000-05:00Well since these options are trading around 4.60, I would say that you are only leaving 40 cents on the table.<BR/><BR/>I think that waiting for the last few pennies is usually what gets people into trouble..Dividend Growth Investorhttp://www.dividendgrowthinvestor.comnoreply@blogger.comtag:blogger.com,1999:blog-9026484337051027793.post-49915350702533624952008-11-14T15:00:00.000-05:002008-11-14T15:00:00.000-05:00I got in at $2. I'm just wondering when I need to sell.Raynhttp://www.blogger.com/profile/14088048313959635426noreply@blogger.comtag:blogger.com,1999:blog-9026484337051027793.post-2005166895911374262008-11-14T09:56:00.000-05:002008-11-14T09:56:00.000-05:00Rayn - It is too late for this opportunity now as BUD has moved near $68. The $65 call option is trading for about $4.20 so little or no upside once transaction costs and taxes are accounted for.Andyhttp://www.blogger.com/profile/14309605333128481208noreply@blogger.comtag:blogger.com,1999:blog-9026484337051027793.post-71886111711182049022008-11-14T09:48:00.000-05:002008-11-14T09:48:00.000-05:00Will we need to exercise the call option to get the full $5? I can't imagine the options will ever tradeat $5 because who would buy them? Wouldn't that be zero sum? (Buy $65 call for $5, receive $70..?)Raynhttp://www.blogger.com/profile/14088048313959635426noreply@blogger.comtag:blogger.com,1999:blog-9026484337051027793.post-18007114730549041582008-11-13T12:35:00.000-05:002008-11-13T12:35:00.000-05:00Thanks DGI. I am going to sell them today (have an order in at $4.20), time to take some profits. I got a nice double on this play, but am down on my yahoo trade. You win a few, and lose a few.Andyhttp://www.blogger.com/profile/14309605333128481208noreply@blogger.comtag:blogger.com,1999:blog-9026484337051027793.post-84343045879182788852008-11-13T12:28:00.000-05:002008-11-13T12:28:00.000-05:00That was a good call - BUD is up handsomely from the time the article was written. I hope your options have appreciated significantly in valueDividend Growth Investorhttp://www.dividendgrowthinvestor.comnoreply@blogger.com