I disagree that it is financially worse to do it now rather than...

I disagree that it is financially worse to do it now rather than in a TO. Firstly, he reason for not converting options early is uncertainty, once converted any subsequent rise in the SP remains untaxed until sale. Secondly the tax hit now at a lower SP means lower tax than if exercised when the SP is a higher price. The only negative is if you have to sell some to cover the tax. Thirdly, as noted above a sale next year will spread the tax burden over two years, and lastly we assuming the sale is for cash rather than shares in the acquiring company. If the latter the tax on that portion may be deferred further until the received shares are sold, if they are sold (not sure how the tax works on share swaps in a takeover in the US, but I assume it is similar to Oz).