How to enter Disney Fox merger. I had 350 sh disney and 500 sh fox. Now I have 516 sh Disney and 1

reginaO

how to enter Disney Fox merger.  I had 350 sh disney and 500 sh fox.  Now I have 516 sh Disney and 166 Fox.  Frac shares sold

Tom Young

At this point "It's unclear" is probably an understatement.  I'd hold off on trying to enter all this at this time.  Did you also receive cash or was the only cash received associated with the fractional share sale?

q_lurker

I concur with Tom that patience is a virtue at this point.  But some quick research seems to indicate to me that you may now have 516 "New Disney" shares and 166 FOXA shares.  FOXA is a different company than the prior TFCF (21st Century Fox).
https://www.thewaltdisneycompany.com/disney-and-21st-century-fox-announce-per-share-value-in-connection-with-71-billion-acquisition/

(more to come, sometime)

reginaO

I only received frac shares cash.  I will wait.  

Thank you

q_lurker

My initial thinking based solely on the link I cited earlier for the case of not taking the cash --- (Caveat:  I was not a holder of the Fox shares, nor do I have any particular professional knowledge about these matters.  Do your own due diligence!)

3/19/19 "Old Fox" spins off "New Fox".  In Quicken terms (2017 and later), a Corporate Spinoff with those two companies, 0.333333 share ratio, and prices of 37.646 for the old and 40.34 for the new (3/19/19 closing).  Those appeared to come in within a penny for a 10,000 initial basis.  The result would be for @reginaO 's case, Removing the original 500 "Old Fox Shares",
Adding 500 "Old Fox" shares back in at a reduced (73.6817%) basis, and
Adding 166.6665 "New Fox" shares with 26.3183% of the original basis.   

NB:  This is actually termed an "exchange" suggesting that the transaction surrenders 26.3183% of the "Old Fox" shares in exchange for the "New Fox" shares.  There are a couple of ways this could be addressed if deemed important such as editing the Add Shares for the "Old Fox" to reflect a lesser number of shares or as a Stock Split. 

3/20/20 Disney (DIS) acquires what remains of "Old Fox".  It appears Disney is providing 0.4517 shares of DIS for each share of "Old Fox" understanding that the shares of "Old Fox" have been reduced by the exchange.  If the share quantity has not been so reduced, the ratio effectively becomes 0.4517 * 0.736817 = 0.33282.  From where I left the first step with 500 "Old Fox" shares in hand, this would become in Quicken a Corporate Acquisition with DIS acquiring "Old Fox" at a share ratio of 0.33282.  In my testing, I used the closing price of DIS on 3/20/19 of 109.90.  I don't believe that price is particularly critical.

After these two transactions, the investor may have two separate cash in lieu sales for fractional shares of "New Fox" and of Disney. 

I have assumed at this point that the New Fox shares carry the original holding acquisition dates forward for ST/LT determination.  

The Quicken user might want to try the above steps, but I would hesitate to commit to them at this time.  It does appear easy enough to delete the generated entries if they prove t be wrong.  Caveat Emptor.  

reginaO

thank you.  I will read this carefully but also wait for Form 8937

Rick Pula

Recently, there was a merger between Fox and Disney.  I owned 54 shares of Twenty-First Century Fox (FOXA). After the merger, I got 17 shares of Disney and 17 Shares of the "new" Fox which still is symbol FOXA.  Respectively there was a little cash in lieu of a full share : Disney 106.94 and Fox 40.34.  I have tried to figure out how this was all figured out so I can enter into quicken.  If I read correctly, the 17 shares for FOX was a spinoff, but I had to search to find this information.  Other than the numbers above, the broker did not furnish how it was calculated.  I did find the following Percentages but no matter how I try to multiply the numbers I do not come up with the 17 shares for each.  Distribution Adjustment Multiple is 1.357190  and is the portion of each share of Twenty-First Century Fox to be exchanged for common stock of the new Fox.  Then the following is written as well:  "because the Distribution Adj Multiple is 1.357190, 0.263183 of each share of 21 Century held at time of distribution will be exchanged for 1/3 of 1 share of FOX(new) common stock".  "Following distribution holders will continue to own 0.736817 of each such share of 21 Century which remains outstanding till the merger with Disney".                                                                                                 I am wondering if anyone out there was affected by this merger and can tell me how to enter into Quicken.  I am unable to make the math work to come up with the 17 shares and cannot find any information that shows how to calculate it.  For the time being, I can only think of doing a shares in and out to bring the stock in balance in quicken but I think I would lose the lot info.  So I am considering doing a sell of 21 Century and then Buys for Disney and the new Fox.  I just cant make the math work to come up with 17 each plus the little bit of cash.  Can anyone help or advise me on this/??

Rick Pula

Thank you q.  I don't completely understand all the logic to the numbers you had in your example but if I do the spinoff of 21 Century (54 * .333333) I get 17.999982 shares of new FOX.  The price of 40.34 you had matches my broker statement so if I multiply that by the fractional portion I come in within a .10 of a penny or 40.339273 which rounded is 40.34                                                                                                    If I follow your numbers for Disney, I would be multiplying 54 21Century * .33282 I get 17.97228 shares for Disney.  I assume I would use this under Acquisition transaction.  I don't understand the other number you had but using the .33282 It brings me to the 17 the broker statement had.  The statement again matched the 109..90 you had and if I multiply that by the fractional share of .97228 I get 106.84.  My statement came in at 106.94 which is .10 off for some reason.   So it would appear I could use your information to do a spinoff and acquisition transaction and then just make a .10 adjustment for cash in lieu difference.  What do you think?  I didn't do it in quicken yet and wanted to see what you thought.  I tip my hat to you on the percentages you came up with cause they work but I don't really know how you got them.

q_lurker

@Rick Pula:  I think you are on the right track for as much as I know about this transaction.  "Old Fox" is however you had the security named previously.  I would edit that security's ticker to something like "FOXA(old)" so that it does not get crossed up with the "New Fox" company (however you will have that identified).

In your case:
1)  3/19/19 Corporate Spinoff "Old Fox" spins off "New Fox" at a 0.333333 ratio and prices of 37.646 ("Old Fox") and 40.34 ("New Fox").  Note that the spinoff company ("New Fox") cannot pre-exist in your file when you enter that Corporate Spinoff action.  Quicken expects to be creating a new company.  In your case, that would appear to create the 17.999982 shares of "New Fox" with 26.3183% of your "Old Fox" basis transferring to the "New Fox".  (Assuming the 54 shares were in one tax-lot, bought at one time, that would be three transactions generated in your Quicken file - a Remove Shares and two Add Shares.)
  
2)  3/20/19 You seem to be following what I would offer as the simpler more direct approach -- Corporate Acquisition with Disney acquiring the 54 shares of "Old Fox" for a 0.33282 ratio giving you 17.97228 shares of Disney.  That should generate in your file two transactions -- Remove Shares ("Old Fox), Add Shares (Disney). 

3)  Date of your choice -- Sell 0.999982 shares of "New Fox" for the $40.34 cash-in-lieu proceeds that you got.  (You can date that sale to the actual date your brokerage credited your account for the cash-in-lieu, or the 3/19/19, or whatever makes sense to you.)

4)  Date of your choice -- Sell 0.97228 shares of Disney for the $106.94 cash-in-lieu proceeds that you got. (Ditto from #3) 

 HTH

Rick Pula

Q.  I followed the dates on my brokers statement which did the acquisition first.  That stock for stock transaction including cash in lieu came out perfect with the percentages you listed.  I encountered a issue with doing the spinoff however. 

The spinoff requires shares of the old Fox to be there which were now gone because I did the acquisition.  Whether I did the spinoff first or not, I'm not sure that I wouldn't have had the same problem with the acquisition.  Both the spinoff and acquisition requires shares .  So after quicken did the share exchange for 21 Century to Disney, I had to figure out how to add the spinoff.  21st Century and the new Fox have the same symbol of FOXA so there was no change to that.  I am assuming I did something wrong because I could not use the spinoff transaction in quicken cause there were no more shares. 

I looked into trying the taxable spinoff which this was as well. However I could not figure that out because it directed a sequence starting with Misc Income.  I could not find that in quicken or was unsure what it was telling me to do.  The description said it would remove shares and add the new ones and that is why I said above that if I did the spinoff first, I would not have been able to do the acquisition cause there would be no more shares. 

So to complete the new fox spinoff, I just did a "shares added" transaction as detailed on my broker statement.  I did a transaction for each line on the statement reflecting the cost basis as well.  Doing this did complete the information for the spinoff.  However, I don't know how I could have done it properly in quicken unless what I did was the proper way. 

I could not use the spinoff and acquisition transaction because the shares of 21st century would be all used up by what ever one I used first.  Maybe you could educate me on what I did wrong or how I could have done it in quicken other than the "shares add" I actually used.  As I stated the acquisition transaction, using your % info came out perfect and to the penny and share quantity I needed .  The actual price was 109.99 not 109.90 and that made that transaction come out perfect with that adjustment.  So maybe you could either validate what I did for the spinoff as ok and correct or if you want to  and have the time, maybe you could educate me on how I should have done it.  In any case, I do thank you for your help because your numbers were so perfect and came out with all the  numbers on the broker statement.  thanks again.                                   R

q_lurker

@Rick Pula
The right way was the sequence I indicated:

• Old Fox spins off New Fox.  Now there are two Foxes each separate and distinct which is why the ticker for the Old Fox needed to be changed prior.
• Then Disney acquires Old Fox.  Now there is only Disney and New Fox.  
• Then Sell fractional New Fox shares (could precede Disney acquisition)
• Then Sell fractional Disney shares

 I can't say is what you ended up with is legit or not.  Question 1:  Do the shares, cost basis and acquisition dates agree with your broker's like information?  Question 2:  Do you believe your broker's like information?  

reginaO

Has the Disney Form 8937 been released

q_lurker

Form 8937's -- two of them.
https://www.thewaltdisneycompany.com/wp-content/uploads/2019/04/Form_8937_and_Attachment_Mergers.pdf
AND
https://www.thewaltdisneycompany.com/wp-content/uploads/2019/04/Form_8937_and_Attachment_Spin.pdf

A very quick look at those did not indicate anything unexpected to me.  
The first of those does suggest a Disney value of $109.45/share as compared to the $109.90 that I suggested in my March 22 post above.  

At this point, I will stick with my previously suggested procedures.  But recognize my credentials -- I have none.  

reginaO

I have read the Form 8937 but still confused.  Could you please simply?

I had 350 sh Disney and 500 Fox.

thank you for your time.

q_lurker

reginaO said:

I have read the Form 8937 but still confused.  Could you please simply?

I had 350 sh Disney and 500 Fox.

thank you for your time.

I'll stick with (quote from) my 3/22/19 message
a)  3/19/19 "Old Fox" spins off "New Fox".  In Quicken terms (2017 and later), a Corporate Spinoff with those two companies, 0.333333 share ratio, and prices of 37.646 for the old and 40.34 for the new (3/19/19 closing).  Those appeared to come in within a penny for a 10,000 initial basis.  The result would be for @reginaO 's case, Remove the original 500 "Old Fox Shares", 
Add 500 "Old Fox" shares back in at a reduced (73.6817%) basis, and 
Add 166.6665 "New Fox" shares with 26.3183% of the original "Old Fox" basis. 

b)  3/20/20 Disney (DIS) acquires what remains of "Old Fox".  It appears Disney is providing 0.4517 shares of DIS for each share of "Old Fox" understanding that the shares of "Old Fox" have been reduced by the exchange.  If the share quantity has not been so reduced, the ratio effectively becomes 0.4517 * 0.736817 = 0.33282.  From where I left the first step with 500 "Old Fox" shares in hand, this would become in Quicken a Corporate Acquisition with DIS acquiring "Old Fox" at a share ratio of 0.33282.  In my testing, I used the closing price of DIS on 3/20/19 of 109.90 109.45.  I don't believe that price is particularly critical.  That should provide you with 166.41 additional shares of Disney.  Your listed transaction entries would be 
Remove 500 "Old Fox" shares
Add 166.41 DIS shares with the cost basis and acquisition dates carried over from the 'adjusted' (not original) basis of the "Old Fox" holding. 

c)  Sell the 0.6665 shares of "New Fox" for cash-in-lieu amount received on date cash was received (or other rational selected date)

d)  Sell the 0.41 shares of DIS for the cash-in-lieu amount received on date cash was received (or other rational selected date).

You should then be showing 166 shares of "New Fox", 516 shares of Disney, and a little cash from the cash-in-lieu fractional share sales.

reginaO

Thank you.  I used the Remove and add shares to figure the results.  I arrived at a very close cost on each. again Thank you

Quicken transactions EX merger etc.  did not seem to like stocks with out symbols. . again Thank you