Question for you bankers

[JS80]

Scenario:
Company A purchases Company B in a stock deal. Company B employees keep their stock options at the original vesting schedule to new shares (no accelerated vesting). Company A stock drops dramatically in couple months after completion of transaction. Company B is pissed.

What are non-cash methods for compensation of loss in value? Can companies write puts and give to Company B employees? Any other creative methods to make whole?

 

[GasX]

Short answer: no

If the company CHOOSES to make them whole, it can issue more options.

 

[imported_Lothar]

AFAIK, No.

But then again, I'm not a banker so don't take my word for it.

 

[CaptainKahuna]

Tough Sh*t. Company A is not required to do anything to compensate Company B's option holders for the loss of value. At the time of the acquisition, the deal would have been approved by both companies shareholders - meaning if Company B's shareholderes thought this was coming, they shouldn't have voted for the merger.