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Assimilation

 

 

Absorption of a new issue of stock into the parent security where the original shares did not fully rank pari passu with the parent shares.  After the event, the assimilated shares rank pari passu with the parent, meaning that they carry exactly the same entitlements and rights (for example entitlement to dividend). Also referred to as funging of shares.

 

Example (that took place in reality):

 

From 08/05/2009, the 477,531,720 ordinary shares (ISIN CODE FR0010697060) will be assimilated on Euronext Paris to the ordinary shares (ISIN CODE FR0004161677) issued by Carrefour Property Development.

 

Further to the assimilation of the 473,531,720 ordinary shares described above, the number of outstanding ordinary shares (FR004161677) on Euronext Paris increased as follows:

 

Old number of outstanding securities: 53,752,078

Number of assimilated securities: 477,531,720

New number of securities: 531,283,798

Dividend due date: from the year 2009

 

Explanation:

As can be seen holders of security FR0010697060 will be debited these securities on the 08/05/2009 and get credited securities of FR0004161677 instead. From that moment on all shareholders of all ordinary shares are entitled to receive dividends from the issuer of the stock.

 

Let's say that an individual shareholder hold the following in his account

ISIN FR0010697060

* Settled amount of shares in his account: 100

* Traded balance: (the sum of all pending deliveries and receipts):  250

(meaning that he has bought 250 more shares of FR0010697060 than he sold but that haven't settled in his account yet).

 

--> His custodian will debit him the 100 shares FR0010697060 and will credit him 100 shares FR004161677.

--> His custodian will cancel all pending trades on FR0010697060 and will reinstruct those trades on FR004161677.

 

 

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