ASX Notice No. 0497.24.05 dated 7 May 2024 outlined the adjustment method for the Off-Market takeover of Boral Limited (ASX Code: BLD) by Seven Group Holdings Limited (ASX Code: SVW).

Seven Group Holdings Limited has now triggered a compulsory acquisition for remaining shareholders. BLD was suspended from trading on Thursday, 6 June 2024 – the last trading day for the company.

Taking into consideration the King’s Birthday public holiday on Monday, 10 June 2024 and ASX Standard ETO Listing timeframes, SVW ETOs will be listed on Tuesday, 11 June 2024 and will commence trading from Wednesday, 12 June 2024. BLD ETO open positions will be converted into an equivalent Seven Group Holdings Limited (ASX Code: SVW) position by applying the following methodology.

Under the takeover offer, BLD shareholders will receive 0.1116 SVW shares and a cash amount of $1.44 ($1.70 less the special dividend of $0.26 paid by BLD as adjusted by ASX Clear on 16 April 2024) as the consideration price when converting to SVW ETOs.

Method of Adjustment

OC = old contract size    

TC = theoretical new contract size (prior to any rounding) which is used in intermediate calculations

      = the final number of SVW shares under the share component

      = 0.1116*104 = 11.6064, using old contract size of 104

NC = Adjusted new contract size (after rounding) = 11*

*The previous notice incorrectly rounded the contract size of 104 to 12 instead of 11. The new contract size will be truncated in line with TMC threshold methodology. BLD ETOs all have contract size of 104.

The difference, due to rounding, between the theoretical new contract size and the adjusted new contract size, will be cash adjusted using the ETO cash equalization adjustment payment formula detailed in the final notice.         

The strike price in each series will be adjusted for the cash component, and in reflection of the reduction of the cash amount, using the following formula:

          New Strike Price        = (Old Strike Price – Cash Consideration)*(OC/TC)

                                                = (Old Strike Price - $1.44)*(104/11.6064) 

Table of adjusted series

The final table of the adjusted series will be released after the completion of the adjustment on Tuesday, 11 June 2024.

Cash Adjustment Payments made for Contract Size Rounding

The theoretical new contract size (TC) will be calculated to 4 decimal places and will be truncated using the TMC threshold so that if the theoretical new contract size falls between 100 and to up to but not including 102, the new contract size will be truncated to the standard 100. If the theoretical new contract size falls above 102, then the new contract size will be truncated down to the nearest whole number

The difference, due to truncation, between the theoretical contract size and the adjusted (new) contract size, will be cash adjusted using the ETO cash equalization adjustment payment formula detailed in the final notice.

For cash equalisation payments for any contract size rounding, takers (buyer) will be credited and writers (sellers) will be debited. (Note, for share consolidations, it is possible for a LEPO taker (buyer) to be debited if the LEPO strike is adjusted back to 1 cent after initial rounding).

OTC series (where any)

Clearing Participants are advised that any OTC series cleared by ASXCL under the ASX Equity OTC Clear service will be adjusted using the same formula as the ETOs as shown in this Derivatives Notice. 

OTC series will be adjusted along with ETO adjustments on the night however, to maintain anonymity; the adjusted OTC series details will not be published in the Derivatives Notice but will be available to CPs the following morning via their own clearing systems.

ETO exercise restrictions (where any) in relation to an adjustment may occur during the period of 10 business days prior to and including expiry, will also apply to OTC series. However such exercise restrictions will not apply on expiry day of an OTC.

Specific Cover

Participants are advised that as multiple contract sizes are changing, arrangements may need to be made for additional lodgement of underlying shares to account for any collateral denoted as specific cover.

What do I need to do by when?

Participants should be aware of the content of this Notice as it sets out the treatment of the proposed takeover of BLD by SVW with newly listed positions in SVW.

When Effective

The adjustment to BLD (SVW) ETOs will be effective on Wednesday, 12 June 2024, with this being the first day of trading in SVW ETOs.

Restriction on Exercise

An exercise restriction has been placed on all BLD ETOs following BLD securities being suspended from quotation from 6 June 2024.

Need more information?

Issued by

Greg Fitzpatrick, Senior Manager, Clearing Operations

Contact information

Clearing Operations

clearing@asx.com.au