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Minyan Mailbag - Options After Merger



Note: Our goal in Minyanville is to remove intimidation from the financial markets and encourage an interactive dialogue among the Minyanship. We share this next column with that very intent.


I am long some K-Mart (KMRT) April $120 calls. What happens to these after the merger with Sears (S) is complete later this month. Will I have the same number of contracts and or will the strike prices change?

Where does one find information on a situation like this anyway?

Many thanks,
Minyan Jeff


The KMRT options you currently own will remain the same. The deal with S is expected to close in late April, after the expiration of your options. But even longer term KMRT options will remain the same.

S shareholders upon closing will receive $50 in cash for 45% and one-half a share in KMRT for 55%. S options will be converted into a new separate series of KMRT options upon closing.

Prof. Succo

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