A number of Australian mutual organisations have recently been demutualised and restructured as public companies. In the case of AMP Society, a cottar comprising average price, or Asian, options formed part of the financial structuring of the demutualisation process. We value the collar and demonstrate that decisions made by policyholders during the demutualisation process are likely to have been affected by their level of uncertainty with respect to the value of AMP shares. This finding has implications as to the quantity of information provided to policyholders during the demutualisation process.
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