spp discussion, page-83

Just to respond to DrWho's earlier comment. I posted on the question of the rights of an option holder during a takeover/merger/whatever. The company has sold a legal right or obligation to the purchase of an option to allow that person the option to convert it to a share at the stated exercise price if/when the option holder chooses up until the expiry date of the option. This legal obligation is the same as any other legal obligation the company enters into. Another entity taking over a company cannot simply dishonour the legal obligations of the company it is purchasing - imagine what would happen to creditors if that were possible. Business just cant run that way. So no fear of a problem with options during a takeover/merger, they remain a legall valid obligation to convert to the share should you choose to.

Cheers, Sharks.