So the offer is a 1 for 4 with an EX date of sometime in...

So the offer is a 1 for 4 with an EX date of sometime in December, so buying new unit's will not make you entitled for the offer.
All this money goes into the MGF fund which is closed ended (buy or sell on the ASX), meaning the money will permanently be in the fund and MFG can get management expenses on these indefinitely.
On the amount you put in you will get an additional 7.5% extra from MFG (again trapped in the close ended fund).
You will also receive options with a 7.5% discount to NTA with a 3 year duration (this money goes into the close ended fund).

Example Below:

You have 10,000 with the old MGE0002AU/MGE fund.
You will be entitled to put in $2,500 into MGF (close ended).
You will then receive a bonus of $187 of MGF (close ended).
You will also receive approximately 1,400 options redeemable for NTA with a discount of 7.5%.

This will leave you with a total of
$12,686 in Magellan and $14,00 options.

Overall this offer is really good for MFG in the long term, short term they will be paying a bit additional benefits but these are all trapped in the close ended fund, quite a clever approach to gaining more FUM. Once MFG receive these funds and exchange rates improve it could be quite a climb in FUM.