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Company Demerger


JPM82

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Hi. Does anyone know what happens with a Spread Betting position when a company undertakes a demerger of part of the company to create an independent listed company?

A company I have open spread bet positions for has announced it plans to demerge part of its operation and create a new company that will list on the market through an IPO. They have stated that all shareholders will get equal shares in the new company as they hold in the existing company. But I would like to know if, when the demerger happens, will IG provide me with an equal open position in the new company, as if I had privately bought shares?

If anyone can help answer this question it would be a big help.

 

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27 minutes ago, JPM82 said:

Hi. Does anyone know what happens with a Spread Betting position when a company undertakes a demerger of part of the company to create an independent listed company?

A company I have open spread bet positions for has announced it plans to demerge part of its operation and create a new company that will list on the market through an IPO. They have stated that all shareholders will get equal shares in the new company as they hold in the existing company. But I would like to know if, when the demerger happens, will IG provide me with an equal open position in the new company, as if I had privately bought shares?

If anyone can help answer this question it would be a big help.

 

In most situations such as these we will reflect the same outcome for leveraged accounts as we do for shareholders. 

So if the conditions of a merger were 1 share in the new company for every one share you held in the previous company we would reflect that on your leveraged account too. 

I hope this helps 

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Thanks Charlotte, I believe that does give the answer I was looking for.

So, as the existing company will remain as a listed company, my open positions will remain as they are, and as the terms of the demerger are that each shareholder will be granted 1 share of the new separate company for each of their shares in the original company, I assume that when the demerger is affected a new position for the equivalent number of shares will automatically be opened for me in the new company and i would then have open positions in both companies 

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