Long dated options after acquisition/bankruptcy?
So I was having a Shower Thought™ today and it occurred to me that I don't know what happens to long dated stock options after M+A activity or a bankruptcy.
Example: I buy a long dated call option on XYZ corp at a strike price of $10 and a settlement date of Jan 2020. Then, in June 2014, ABC Megacorp acquires all of XYZ corp by means of a $15 tender offer.
$15 is pretty good and my thesis that XYZ shares are worth more than $10 has been validated. But what happens to me? There will not be any shares of XYZ to tender to me in Jan 2020. Are optionsholders like me made whole by ABC as part of the tender?
Example 2: I buy a long dated put option on QRS corp at a strike price of $10 and a settlement date of Aug 2019. Then, in April 2014, QRS corp goes bankrupt - dead in the water, stock price $0.001 and then delisted.
What happens to me? My thesis was right - QRS corp shares are worth considerably less than $10. But there will be no shares for me to buy and tender in Aug 2019. Who takes it on the chin?