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Energy transfer equity LP merger with Energy Transfer partners

Leslie Charmatz

I am using Quicken Home and Business Windows 2017 v R17.4. I need to effect merger of ETE and ETP using 1.28 shs ET (New Entity Energy Transfer LP) per share of ETP (Energy Transfer Partners LP) in 3 different accounts. When I enter the info under corporate acquisition (stock for stock) one account ends up with more shares of ET maybe including shs that had already been sold as of the merger date 10/19/18. For other 2 accounts the shs of ET are correct.

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mtn_living

I just did same transaction and share count (within a fractional share) are correct in three accounts I held ETP.

q_lurker

So ETP acquired ETE?

There would first be a Remove Shares of ETE. Did that remove the right number (all) of shares?
There would then be an Add Shares for each lot of ETE that you had owned. If you bought ETE at three times in this account (three lots), you would have three Add Shares adding in 1.28 times as many shares as you had of ETE for that lot. Is any one of those Add Shares transactions wrong? If so, you can edit that transaction separately to make things right.

HTH

mtn_living

ETE acquired ETP at a ratio of 1.28 ETE units per 1 ETP unit. I used corporate acquisition and all the add/remove transactions came out right. ETE then changed its symbol and name to ET; Energy Transfer. I just tweaked that in security detail though technically i think it was another acquisition into a new name.

Leslie Charmatz

ETE acquired ETP at a ratio of 1.28 ETE units per 1 ETP unit. I used corporate acquisition and all the add/remove transactions came out right. ETE then changed its symbol and name to ET; Energy Transfer. I just tweaked that in security detail though technically i think it was another acquisition into a new name.

Since I have ETE history I do not want to use ETE as the surviving entity but directly to ET. This may be what caused the errors reported. Also spoke to Energy Transfer IR Brent Ratcliff. He indicated that the shares of ET should be rounded up so I am still missing 1 share from each account that previously held ETP. So had 803 shares ETP, should result in 1028 ET shares not 1027 as reported by Oppenheimer, or there s/b a fractional share payment in cash to make up for this.

Leslie Charmatz

So ETP acquired ETE?

There would first be a Remove Shares of ETE. Did that remove the right number (all) of shares?
There would then be an Add Shares for each lot of ETE that you had owned. If you bought ETE at three times in this account (three lots), you would have three Add Shares adding in 1.28 times as many shares as you had of ETE for that lot. Is any one of those Add Shares transactions wrong? If so, you can edit that transaction separately to make things right.

HTH

Actually just the reverse, ET (renamed ETE) entity is the surviving company that EPD was converted from in the merger.

q_lurker

So ETP acquired ETE?

There would first be a Remove Shares of ETE. Did that remove the right number (all) of shares?
There would then be an Add Shares for each lot of ETE that you had owned. If you bought ETE at three times in this account (three lots), you would have three Add Shares adding in 1.28 times as many shares as you had of ETE for that lot. Is any one of those Add Shares transactions wrong? If so, you can edit that transaction separately to make things right.

HTH

Then just reverse the tickers with respect to my questions. The questions remain the same.

Leslie Charmatz

So ETP acquired ETE?

There would first be a Remove Shares of ETE. Did that remove the right number (all) of shares?
There would then be an Add Shares for each lot of ETE that you had owned. If you bought ETE at three times in this account (three lots), you would have three Add Shares adding in 1.28 times as many shares as you had of ETE for that lot. Is any one of those Add Shares transactions wrong? If so, you can edit that transaction separately to make things right.

HTH

see my comment below I want to use ET as the surviving co. and ETP as the acquired entity. I have a significant history in ETE which would all be converted to ET if use ETE as the surviving entity and then edit security to ET (Energy Transfer LP)

q_lurker

ETE acquired ETP at a ratio of 1.28 ETE units per 1 ETP unit. I used corporate acquisition and all the add/remove transactions came out right. ETE then changed its symbol and name to ET; Energy Transfer. I just tweaked that in security detail though technically i think it was another acquisition into a new name.

Generally speaking, if ETE changed its name and symbol to ET, that is also what you would do in Quicken --a corporate name change and then edit the symbol. But that does change all historical transactions and may thus be confusing and less desirable.

The alternative is to create the new security, ET, and then have it acquire the ETE security at a 1:1 share ratio. That approach leaves history unchanged. If you do not currently own ETE in any accounts, nothing happens. If you do own ETE shares, Remove Shares (ETE) and Add Shares (ET) transactions will be created. That can add 'clutter' to your transaction lists. Your choice.

Once you have the new ET security created in an acceptable manner, as mtn_living indicated, the corporate acquisition ET acquiring ETP should work. But ...

At a 1.28 exchange ratio, 803 ETP shares will become 1027.84 ET shares. Normally, as you note, you would get 1027 shares plus a small amount of cash-in-lieu for the fractional share. In Quicken, that should be treated as a sale of the fractional share for that cash-in-lieu amount.

I have never heard of the round up process being applied here. If truly applicable, I would choose to edit one or more of the Add Shares transactions to accomplish that effect. If it was one lot, I would edit the one Add Share to reflect getting 1028 shares instead of 1027.84. With multiple lots, you can pick and choose the edits. (Sidebar: my approach with multiple lots is to always make sure the share quantities are uniformly precise - usually to only 3 decimal places.)