Re: merger / buyout

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In Reply to: Re: merger / buyout posted by Mark on July 29, 2005 at 15:14:56:

: : Hello,

: : How do I record a buyout / merger? For example Royal Dutch Shell - shares of SC replaced by ~0.862 of RDS-B with fractional shares sold on open market (yielded effective $62.15385389/share)?

: : Thanks,
: : Ron

:
: Hi Ron,

: I'd suggest doing 3 things:

: 1) Record a 0.862 for 1 split.
: 2) Record a sell transaction for the number of shares sold.
: 3) Change the Name/Symbol under "Investment Properties...".

: You might also want to record a memo with either or both the split and sell transactions so you can remember the cause.

: Thanks,
: Mark
: --
: Mark Beiley
: Fund Manager, portfolio management software for Windows 95/98/ME/NT/00/XP/2003
:

Mark,

Thanks for the quick response, but I'm not sure this is the "right" way.

If I change the symbol don't I lose the history of the old investment? Wouldn't subsequent historical price downloads for older date ranges wipe out the correct performance history of SC?

This is a merger - both entities existed prior to the corporate action. I need to record the replacement of SC with RDS/B with the correct cost basis without breaking the historical performance of SC.

What I have attempted to do is:

- record new investment in RDS/B with shares = .862 x old SC shares @ $62.xx / share
- record sell of fractional RDS/B shares @ $62.xx / share

But now I need to deal with the SC disposition - I tried a Return of Capital Distribution but it doesn't change the # of shares held.

Seems like my approach doesn't work either.

There should be a simple way to enter this corporate action.

Any ideas?

Ron

Replies:

• Re: merger / buyout Mark 17:06:05 07/29/05 (0)