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LEND LEASE CORPORATION STAPLING PROPOSAL – IMPLICATIONS FOR ETOS ...
No: 144 ACH & ASX Market Notice DERIVATIVES – EQUITY AND INDEX OPTIONS LEND LEASE CORPORATION STAPLING PROPOSAL – IMPLICATIONS FOR ETOS Date: 30 October, 2009 Key topics ASX Market Participants and ACH Clearing Participants are advised that Lend Lease 1. Lend Lease Corporation Corporation (ASX Code: LLC) has announced on 12 October 2009, a stapling proposal. Stapling Proposal - Adjustment This involves distributing units in a newly created trust, Lend Lease Trust (“LLT”) to Implications for ETOs shareholders on a 1:1 basis and “stapling” each unit and share together. The stapling proposal is subject to shareholders approval at an AGM to be held on 12 November 2009. If approved, LLC shareholders will receive by way of dividend one unit in LLT for each Lend Lease share. Indicatively, the stapled securities will trade as the Lend Lease Group. During the period of deferred settlement trading from 13 November 2009 to 26 November 2009, the ASX code will be LLCDA. From 27 November 2009, normal T+3 settlement trading begins and the ASX underlying code will be LLC. Participants are advised to refer directly to the full details in the Explanatory Memorandum for the stapling proposal. If the stapling proposal is approved by shareholders and become effective, the securities of the management entity and LLC will be stapled together. Each LLC shareholder will end up holding Stapled Securities in the Lend Lease Group on a 1:1 basis. The ASX code will remain the same. Note that during the deferred trading period, it will trade as LLCDA. Authorised by Indicative Key Dates from ETOs perspective. Tim Hogben LLC shareholders meeting Thursday, 12 November 2009 ASX contact Last day of trading of LLC shares if stapling Peter Ho is approved Telephone Deferred settlement trading in stapled Friday, 13 November 2009 (02) 9227 0668 securities commences under the name Lend Lease Group (ASX code: LLCDA) Australian Clearing House Pty Ltd ABN 48 001 314 503 Stapling Record Date - record date for Thursday, 19 November 2009 ASX Limited ABN 98 008 624 691 determining entitlement of LLC shareholders Exchange Centre to LLCDA Stapled Securities 20 Bridge Street Sydney NSW 2000 Effective date Friday, 20 November 2009 PO Box H224 Australia Square Stapled securities commence trading on a Friday, 27 November 2009 NSW 1215 Telephone 1800 814 051 normal T+3 settlement basis (ASX code: Intl Facsimile 61 2 9251 5525 LLC) Facsimile 1300 300 577 Internet: http://www.asx.com.au DX 10427 Stock Exchange Sydney No responsibility is accepted for any inaccuracies contained in the matter published. Clm14409 Page 1 of 2 No: 144 ASX in consultation with the ACH has determined that the following adjustment will be made provided the stapling proposal becomes effective: ASX will, after the close of business on the last date of trading of LLC shares adjust Open Positions in LLC Options under ASX Market Rule 11.3 for Adjustment, under provisions of Procedure 10 (formerly ASX Business Rule 188.8.131.52) Alternative Adjustments as follows: • LLC ETOs will become LL9 ETOs; • the underlying financial product will change from shares to become Lend Lease Group stapled-securities, initially trading as LLCDA on a deferred settlement basis; • the new Contract Size NC, based on an existing size of 1000 LLC shares, will become 1000 stapled securities over LLCDA; • new Exercise Price in each Series = (Old Exercise Price)/(NC/OC); Note that effectively, the contract size and exercise price of LLC options will remain unchanged because of the 1:1 ratio, except that the underlying financial product will change from Shares to become the Stapled securities. Any exercise of LL9 ETOs will result in deferred settlement of the underlying stapled securities. Effective Date The adjustment will be effective for trading commencing on Friday, 13 November 2009. Restriction on Exercise ASX will restrict exercise of LLC options from 7.00 pm on the day before the last day of trading of LLC shares. ASX has determined that the restriction on exercise under ASX Market Rule 25.3.1 is appropriate having regard to ASX Market Rule 1.14 and is in the interest of maintaining a fair and orderly market in LLC Options and LLC shares and ACH has similarly determined under ACH Clearing Rule 20.1.8 and ACH Clearing Rule 1.15. The exercise restriction will be lifted when LLC share Options have been adjusted into LLC stapled securities. Further Change in ASX Code and ETO Code When Normal Trading Commence The last day of trading of LLCDA on a deferred settlement basis will be, indicatively, Thursday, 26 November 2009. Trading on a normal T+3 settlement basis will begin on Friday, 27 November 2009. From Friday, 27 November 2009, LL9 ETOs will become LLC ETOs. Any exercises or LL9 ETOs on Thursday 26 November 2009 (this also being the expiry day of November series) will result in the exercises reported under the new code LLC, rather than “as is”. Treatment of Regular Distributions Participants are reminded that under Derivatives Notice 172 dated 29 September 2005, a policy for “no adjustments” for regular ordinary distributions has been implemented by ASX from 3 October 2005. This will apply to ETOs over Lend Lease Group stapled securities. This is relevant as prior to the stapling proposal, LLC ETOs are over shares that pays dividends. Following the stapling involving an in-specie dividend of a new trust without assets initially, the stapled securities are able to pay in the future, regular ordinary distributions that may include a tax deferred component. LLC has stated that existing assets cannot be transferred to the trust. ASX, in consultation with ACH, have determined that there will be no grandfathering of existing LLC ETOs positions, that go out to December 2012. Clm14409 Page 2 of 2
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