Call option meaning

Call or put option? In a call option, the purchaser holds the reins, as it may demand transfer of the asset. The seller should recognise that its intentions for the site could be curtailed by that right, and plans for the property restricted. A put option, by contrast, places control with the seller, enabling it to require the purchaser to take the property and complete the acquisition, obliging the buyer to buy. Option period For a call option, the vendor should be mindful that the land could be effectively frozen throughout the option window, potentially sterilising its use. Accordingly, the deal ought to state a clear long‑stop date to cap the period. The Perpetuities and Accumulations Act 2009 (PAA 2009) removed the rule against perpetuities for options, so those granted on or after 6 April 2010 do not need a specified long‑stop date in this context. Before PAA 2009, a call option lapsed if not exercised within 21 years. Where exercise depends on the buyer securing...

Call or put option? Under a ‘call’ option, the purchaser holds the reins, as it can demand a transfer of the property. By contrast, a ‘put’ option leaves the seller in charge, enabling it to compel the purchaser to complete a transfer. Accordingly, the purchaser must take particular care that the transfer provisions—especially on valuation and, where relevant, insurance—are as advantageous as possible. Seller's charges If the property is charged when the option is granted, the mortgagee might defeat the option by using its power of sale. To guard against this, ensure the mortgagee either: becomes a party to the agreement (uncommon in practice), or gives written consent to the grant of the option In both scenarios, the mortgagee should confirm that, if the purchaser exercises the option, it will take the property free of the charge; or, if the mortgagee sells under its power, it cannot dispose of the property free of the option. Is the exercise of...

In this issue: Public company takeovers Equity capital markets Corporate governance Partnerships Private equity Members LexTalk®Corporate: a Lexis®Nexis community Daily and weekly news alerts New and updated content Dates for your diary Trackers Useful information Public company takeovers Takeover Panel publishes note on cancellation of admission to trading The Takeover Panel (Panel) has issued a new note offering advisers guidance on cancelling an admission to trading for companies caught by the Takeover Code (Code). It confirms that companies with registered offices in the UK, the Channel Islands or the Isle of Man, whose securities are traded on specified markets, remain within the Code for two years after cancellation, irrespective of where central management and control is located or whether they re-register as private companies. The Panel encourages early engagement with the Panel Executive when a cancellation is contemplated, to ensure shareholders receive suitable disclosure about the Code’s continued effect, and it outlines...

Mergers Secretary of State makes statement to Parliament on RedBird IMI/Telegraph Media Group merger Addressing Parliament, the Secretary of State for Culture, Media and Sports provided an update on the proposed takeover of Telegraph Media Group Ltd (TMG) by RB Investco Ltd, and on her continuing assessment of the deal, which follows a public interest intervention. She confirmed that RB Investco had informed her of its plan to dispose of the call option agreement granting it the right to acquire TMG, thereby in effect stepping back from the purchase...

Banking & Finance—June 2025 case round-up Waller-Edwards v One Savings Bank Plc [2025] UKSC 22 Undue influence—mixed non-commercial transactions—de minimis threshold—Etridge guidance In this appeal, the Supreme Court allowed the challenge unanimously, deciding that a creditor is placed on inquiry—that one party’s assent to the deal may have been procured through undue influence—whenever a non-commercial hybrid arrangement, on the face of it, features a more than de minimis (ie trivial) borrowing component that extinguishes the liabilities of only one co-borrower and so may not be to the other’s financial advantage. Joanne Wicks KC, barrister at Wilberforce Chambers, and Tricia Hemans, barrister at Falcon Chambers, consider the ruling’s implications in News Analysis: Supreme Court holds banks must follow the Etridge protocol where non-commercial hybrid transactions include a more than de minimis surety element (Waller-Edwards v One Savings Bank Plc). This reiterates the Etridge principle in the context of such arrangements, for banks and lenders...

A contractual option to take a lease for a further term is a ‘call’ option It gives the tenant a one-sided entitlement to demand a renewal lease. The tenant is not compelled to use it, yet upon exercise the landlord must honour the bargain. The ability to seek a renewal lease is commonly conditional on satisfaction of conditions precedent (for example, all rent paid and other tenant covenants observed) – for further discussion see Conditions precedent below. A call option is a contract for the sale of an interest in land within the Law of Property (Miscellaneous Provisions) Act 1989, s 2(1). The option must: be in writing contain or incorporate all of the terms expressly agreed between the parties be signed by or on behalf of each party When the tenant exercises the option by giving notice to the landlord, that act is simply a unilateral trigger for the obligation to grant the lease. Accordingly, a valid exercise of...

This Practice Note describes: the kinds of option that can be granted under a tax-advantaged Company Share Option Plan (CSOP) and a tax-advantaged Save As You Earn (SAYE) scheme the statutory requirements that CSOP options and SAYE scheme options must meet to obtain the available tax advantages the tax benefits associated with CSOP options and SAYE scheme options CSOP options and SAYE scheme options are forms of tax-advantaged employee share option that allow the holder to call for the relevant shares in a company (the Scheme Company) covered by the option at a later date, at a price (the option price) set when the option is granted. A CSOP or SAYE scheme created by a parent company in a group can be extended to any or all companies within that group...

A hybrid meeting is a shareholder meeting format offering simultaneous physical and remote electronic participation. In the past few years, interest in running hybrid general meetings and annual general meetings has risen. Initially this shift came from improvements in remote communication tools, and was then accelerated by necessity during the coronavirus (COVID-19) pandemic when limits on gatherings applied. During such mandated restrictions, virtual formats were used as a necessary substitute. Today, many companies enable members to join meetings using some form of remote technology. There is also curiosity about holding meetings that are entirely virtual, where shareholders may only attend and vote via an online platform. However, with time passed since the COVID-19 pandemic, mainstream sentiment has moved away from virtual-only meetings. This is due to concerns among institutional investors about formats that do not provide a physical option, save for emergencies and/or where government guidance mandates such an approach. Reasons cited include the perceived value of members being able to put questions to management face to face. Outside...

This [ Agreement OR DEED ] is entered into on [ insert day and month ] 20[ insert year ] Parties [ insert name of buyer ] [ of [ insert address ] OR trading as [ insert trading name ] of [ insert address ] OR a firm with its principal place of business at [ insert address of firm ] OR [ an LLP OR a company ] incorporated in [ insert place of incorporation, eg England and Wales ] with registered number [ insert registered number ] whose registered office is at [ insert address ] ] (the Buyer); and [ insert name of seller ] [ of [ insert address ] OR trading as [ insert trading name ] of [ insert address ] OR a firm with its principal place of business at [ insert address of firm ] OR [ an LLP OR a company ] incorporated in [ insert place of incorporation, eg England and Wales ] with...

date [ date ] Parties [ name of (first) Seller ] [ and [ name of second Seller ] both ] [ of OR incorporated in England and Wales (company registration number [ number ]) whose registered office is at ] [ address ] [ and whose address for service in England and Wales is [ address ] ] (Seller) [ name of Buyer ] [ of OR incorporated in England and Wales (company registration number [ number ]) whose registered office is at ] [ address ] [ and whose address for service in England and Wales is [ address ] ] (Buyer) 1 Definitions For this Agreement, the terms below are to be understood as follows: Buyer’s Solicitors — [ name ] of [ address ] (reference [ details ]) or any other solicitors the Buyer notifies to the Seller; Competent Authority — any of: (a) a local authority, government department, or any body...

Parties On [date], [Seller details] (Seller) and [Buyer details] (Buyer) enter this Option Agreement. Definitions Deposit: £[...]; Option Fee: £[...] plus any VAT; Interest: [4]% above [bank] base rate. Option: Buyer may require transfer on paying the Price within the Option Period ending [time/date]. Legislation, VAT and Working Day as defined; Property, Price and solicitors as specified. Grant of Option For the non-refundable Option Fee (separate from the Price unless stated), the Seller grants the Option; it lapses if not exercised in time; any necessary mortgagee consent is/will be in place. Exercising the Option The Buyer may serve an Option Notice within the Option Period for the whole Property [and must pay any Deposit as required]. On valid exercise, the sale contract in the Schedule immediately arises. Notices, Costs and VAT Notices are by hand or pre-paid post to stated addresses; VAT is additional; costs are as provided; overdue sums bear Interest. Termination and...