Arrangements for Adjustment of MGM China Structured Products and Options
Market Operations
18 Feb 2015
Hong Kong Exchanges and Clearing Limited (HKEx) announced the arrangements for the adjustment to MGM China Holdings Ltd. (MGM China) structured products and options to account for MGM China's special dividend.
Highlights of the adjustment arrangements are set forth below. Investors should consult their brokers for further details, or if they have any questions regarding the adjustment.
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Underlying Stock (Stock Code)
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MGM China Holdings Ltd. (2282)
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Corporate Action
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Special Dividend of $0.816 per share
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Ex-date
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4 March 2015
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For details of the special dividend, please refer to the announcement made by MGM China on 17 February 2015.
Structured products with shares of MGM China as underlying asset
The listing documents of all existing structured products with the shares of MGM China as underlying asset contain provisions that deal with a cash distribution including a special dividend. Structured product issuers will make announcements in the evening of 3 March 2015 regarding the relevant adjustments (including the adjusted entitlement and adjusted exercise price as appropriate) and investors should read carefully the contents of such announcements.
MGM China Options
Trading Arrangements
The trading arrangements for the existing MGM China stock options under trading symbols MGM and MGA1 will be as follows:
| 1. |
Adjustment and Transfer of Outstanding Positions
Open positions of MGM China stock option series under trading symbols MGM and MGA which exist after the market close on the business day immediately before the ex-date will be adjusted and transferred to stock option series under trading symbols MGB and MGC respectively.
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| 2. |
Introduction of New Stock Option Series for Trading
On the ex-date, new MGM China stock option series based on the standard contract size will be introduced for trading under the standard trading symbol MGM.
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For MGM China stock option series under trading symbol MGM, details of the adjustment procedures are as follows:
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Adjustment Ratio (AR)
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(underlying stock closing price – special dividend)
underlying stock closing price
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Rounded to the nearest
4 decimal places
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Adjusted Exercise Price (AEP)
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Exercise price of outstanding option series x AR
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Rounded to the nearest
2 decimal places
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Adjusted Contract Size (ACS)
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Exercise price of outstanding option series x
(400 shares / AEP)
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Rounded to the nearest
4 decimal places
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Adjusted
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MGB
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ACS
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From ex-date to
30 March 2016
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No
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Standard
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MGM
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400
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From ex-date onwards
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Yes
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| 1 |
MGA stock option contracts are the adjusted contracts generated from capital adjustment made on 4 March 2014 due to the Special Dividend of $1.02 per share. |
For MGM China stock option series under trading symbol MGA, details of the adjustment procedures are as follows:
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Adjustment Ratio (AR)
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(underlying stock closing price – special dividend)
underlying stock closing price
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Rounded to the nearest
4 decimal places
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Adjusted Exercise Price (AEP)
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Exercise price of outstanding option series x AR
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Rounded to the nearest
2 decimal places
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Adjusted Contract Size (ACS)
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Exercise price of outstanding option series x
(ACS*2 / AEP)
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Rounded to the nearest
4 decimal places
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Adjusted
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MGC
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ACS
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From ex-date to
30 March 2015
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No
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Adjusted
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MGA
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ACS*
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Not available for trading from
ex-date onwards
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No
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| 2 |
ACS* as per the contract sizes is stated in the comparative table of strike prices in the circular issued on 3 March 2014. |
Investors should note that the adjusted and standard stock option series have different contract sizes. There will not be any changes to the number of open positions and other contract terms after the transfer of positions.
Ends