Westfield Group Restructure and Merger with

Notice
Notice reference number: 0693.14.06
Notice date: 25/06/2014
What’s this about?
Effective date: 25/06/2014
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Westfield Group Restructure and Merger with Westfield Retail Trust – Adjustment Implications for WFD ETOs
Market Participants and ASX Clear (ASXCL) Participants were advised in ASX Notice No. 0675.14.06 dated 24 June
2014 of name and code Change from Westfield Group (ASX Code: WDC) to Westfield Corporation (ASX Code: WFD)
and ASX Notice No. 0588.14.06 dated 5 June 2014 of the “rights style” adjustment method that applied for the Westfield
Corporation (ASX Code: WFD) ETOs under the spin-off by way of a 1.246 for 1 in-specie distribution of Scentre Group
(ASX code: SCG).
The following sets out the adjustment calculations determined for WFD ETOs.
For ease of reference, the “rights style” adjustment formula is set out below.
NC = OC + n*r/S
Where:
NC
= new contract size
OC
= old contract size (100 and 127)
n
= the number of rights attributed to each OC determined by the issue ratio applied to the old contract size,
(issue ratio is 1.246 SCG for 1 WFD)
r
= the market value of the each rights as determined by ASX, using VWAP SCG on 25 June 2014 from 10.09am
AEST onwards
S
= VWAP of WFD on 25 June 2014 from 10.09am AEST onwards
New Strike = Old Strike * OC/NC
For the strike calculations, the new contract size used by ASX is rounded to 4 decimal places, and the strike factor
(OC/NC) is rounded to 6 decimal places.
Adjusted Series
SCG commenced trading on a deferred settlement basis on Wednesday, 25 June 2014.
The VWAP of SCG was determined to be $3.0970, and the VWAP WFD was $6.9326. Accordingly,
For 100 contract size:
NC
= 100 + 100*1.246/1 * 3.0970/6.9326
= 155.6626 (to 4 decimal places)
= 155 rounded to the nearest share by the TMC truncation method.
The strike factor was 100/155.6626 = 0.642415
For 127 contract size:
NC
= 127 + 127*1.246/1 * 3.0970/6.9326
= 197.6914 (to 4 decimal places)
= 197 rounded to the nearest share by the TMC truncation method.
The strike factor was 127/197.6914 = 0.642415
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ASX Notice Notice
(continued)
OTC series (where any)
Clearing Participants are reminded that any OTC series cleared by ASXCL under the ASX Equity OTC Clear service
will be adjusted using the same formula to the ETOs as shown in the Derivatives Notice.
Specific Cover
Participants are reminded that as the contract size may be changing arrangements may need to be made for additional
lodgment of underlying securities to account for any collateral denoted as specific cover.
What do I need to do and by when?
Participants should be aware of the content of this Notice as it sets out the treatment of the proposed restructure with
respect to open positions in ASX WFD ETO contracts.
25 June 2014 Effective Date - Reminder
Participants are reminded that under “rights-style” adjustments, the adjustment to WFD ETOs has been effective from
the commencement of “UA” (Under Adjustment) trading basis on 25 June 2014 notwithstanding that the adjusted
contract size and adjusted strikes are published by ASX and ASXCL only after trading close.
ETO Cash Equalisation Adjustment Payments for Contract Size Roundings by TMC Threshold Truncation
Participants are reminded that ETO cash equalisation adjustments for contract size roundings are effective.
The cash adjustment payments will be posted by ASXCL as close as practicable to the effective adjustment date. For
clarity, ETOs are LEPOs and non-LEPOs (ordinary options, American or European). Takers will be credited and writers
debited a cash equalization payment for any contract size rounding calculations. (For share consolidations, it is possible
for a LEPO taker to be debited if the LEPO strike is standardized back to 1 cent after initial rounding).
Where the old contract size of a series before an adjustment is 100, ASX will apply a standardizing “TMC threshold” so
that if the calculated 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, and a cash equalisation adjustment payment made.
For the purpose of the cash equalisation adjustment payment, the percentage of the calculated contract size that was
truncated was determined by ASX to be:
For an old contract size of 100
(TC-NC)/TC = (155.6626-155)/155.6626 = 0.425664% to six decimal places in the percentage figure.
For an old contract size of 127
(TC-NC)/TC = (197.6914-197)/197.6914 = 0.349737% to six decimal places in the percentage figure.
Please refer to table of adjusted series which can be found “here”.
Need more information?
Issued by
John Williams, General Manager, Listings Operations
Contact Details
Eldon Hernando +612 9227 0838, [email protected]
4B
Disclaimer
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