What is a mandatory takeover?
Updated over a week ago

A mandatory takeover is when a company acquires another company by buying a majority stake but existing shareholders are not given the opportunity to vote on the offer.

How will shareholders be affected?

If you are the shareholder of a company subject to a takeover, you should receive a message to let you know when the takeover will happen and what will happen to your current holdings.

Depending on the nature of the takeover, the shares of the old company may be removed from your portfolio and you may receive cash in its place. At this point, you would cease to be a shareholder altogether. Alternatively, your shares may be converted to the shares of the newly formed company. If the shares of the company are not already supported on the Freetrade app, the new stock will be reviewed to consider its addition to the platform, but there is no guarantee that all outturns can be supported. In this instance, you may receive cash in lieu of your entitlement.

Any entitlement to shares may be rounded down to the nearest whole share, in which case you would receive a cash payment for your fractional share entitlement. Alternatively, your shares may be issued, including a fraction of a share, up to 8 decimal places.

Once the corporate action has been processed and your portfolio has been adjusted accordingly, you will receive a confirmation message in-app. Due to our current corporate action process, any cash in lieu or newly received shares will not appear as an item in your Activity feed, but will be added to your account.

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