proration means: This refers to the division of stock and cash in a takeover proposal. A takeover often involves a mix of equity and cash. Stockholders have the option to choose equity or cash. The stock will be prorated after the election has been made. If the offer to buy was for 500 million cash and 500 millions shares, the shareholders would get 50 cash each if they chose cash. 25 shareholders could choose to get cash. The other 75 would receive 75 equity and 75 cash. If the value of the new shares is greater than that of the older shares, the proportions can be difficult to calculate. Small shareholders might get 100 cash if they have 100 shares. It is not a good idea to own much less than 100 shares. (in Stock Market Dictionary)