A spin-off is the creation of an independent company through the sale or distribution of new shares of an existing business or division of a parent company. This is usually carried out when spin-off companies are expected to be worth more as independent entities rather than as parts of a larger entity.
Spread bet and CFD accounts:
On spin-off ex-date, we’ll create a position on the new company at a level of zero in accordance with the terms of the spinoff. Once tradeable, you can then choose whether to trade the new company or not.
If you have a guaranteed stop on your spread bet or CFD position, we’ll amend it in accordance with the terms of the offer. A separate position will then be posted on your account in the name of the spun-off company, with a stop attached to ensure your total monetary risk remains the same.
Share dealing and ISA accounts:
On, or a few days, after distribution date – when shares of the new company are issued – we’ll create a position on the new company at a level of zero in accordance with the terms of the spinoff. You can then choose whether to trade the new company or not. Please note that it can take several days after pay date for us to receive the shares, which can cause a delay in allocation.
Please note, this information is intended as a generic example, and subject to change at any point. It may not apply in every scenario.