How to track merger resulting in one company with 2 share classes?

HCC2

In one IRA account, I have holdings in two private equity companies. They are going to merge. In the new company, I shall have holdings in 2 share classes, each with its own share value...very different amounts. This account is hand entry, so no download. Does Quicken even handle 1> in a "security", or do I need to create two new "securities", each with its own share value?

Frankx

Hi @HCC2,

So, it sounds like you currently own shares in each of  2 PE companies that are merging.  Presumably your "Quicken IRA account" has shares of each PE company in it currently.  Since the merger will result in one company that has two different share classes AND since you will receive shares of both share classes as a result of the merger, then yes - you will need to establish 2 share classes for the new company in your Quicken "Security list".  If we assume the name of the new company is "Acme Company" you can call them "Acme Company - Class A shares" and  "Acme Company - Class B shares".

As far as entering the actual merger transaction details, that will depend on the specific details of the transaction.  I am guessing that perhaps each of the two original PE companies will constitute one of the two share classes.  If that is the case, the transaction that you will need to enter into Quicken will be much easier.  That's because you could simply do a "security name change" for each of the old companies and then follow that with an adjustment to the number of shares via a "shared added" or "shares removed" transaction for each new entity.

So let me know whether what I have described is close to what will happen in the "merger transaction" and/or where I have guessed wrong.  And then, If you provide some specific details I may be able to clarify or adjust what I've said above so that you'll be able to properly record the transactions.

Frankx

Frankx

Hi again @HCC2,

So technically that is an "acquisition" of Phoenix by Shine, but it really doesn't cause any additional problems, and may actually make things slightly easier.  I had said: "I am guessing that perhaps each of the two original PE companies will constitute one of the two share classes." and that seems to be true, based on your new information.

There will be plenty of time to sort things out once the details firm-up.  Feel free to post back with any questions or concerns.

Frankx

Frankx

Hi @HCC2,

So, it sounds like you currently own shares in each of  2 PE companies that are merging.  Presumably your "Quicken IRA account" has shares of each PE company in it currently.  Since the merger will result in one company that has two different share classes AND since you will receive shares of both share classes as a result of the merger, then yes - you will need to establish 2 share classes for the new company in your Quicken "Security list".  If we assume the name of the new company is "Acme Company" you can call them "Acme Company - Class A shares" and  "Acme Company - Class B shares".

As far as entering the actual merger transaction details, that will depend on the specific details of the transaction.  I am guessing that perhaps each of the two original PE companies will constitute one of the two share classes.  If that is the case, the transaction that you will need to enter into Quicken will be much easier.  That's because you could simply do a "security name change" for each of the old companies and then follow that with an adjustment to the number of shares via a "shared added" or "shares removed" transaction for each new entity.

So let me know whether what I have described is close to what will happen in the "merger transaction" and/or where I have guessed wrong.  And then, If you provide some specific details I may be able to clarify or adjust what I've said above so that you'll be able to properly record the transactions.

Frankx

HCC2

I WAS sure the situation you describe is EXACTLY what is going to happen at the end of March (projected). Your reply, however, made me head back to my email. Our Advisors’ revised summary included the fact that the “merger” will consist of SHINE “absorbing” Phoenix. Is that a merger or an acquisition?

Supposedly, Phoenix shares will be converted to a brand new SHINE share class, and a conversion example is provided that matches our holdings exactly. Nothing was noted about the fate of my original shares in SHINE. Sounds as if I shall still be dealing with two share classes in one company.

Lots of good reasons for getting crazy in advance. Matching Quicken to custodial data records for this sort of thing is...not smooth. The timing of this doesn't help. I think I need to wait until our meeting with those advisors on 3/2. Need to get clear what is happening. Fret a little later.

Thank you for being so responsive and for pointing me to what I need to know.
If I end up in early April pulling my hair out, I shall post again, and hope I can tap your expertise and clear explanations.

HC Crain

Frankx

Hi again @HCC2,

So technically that is an "acquisition" of Phoenix by Shine, but it really doesn't cause any additional problems, and may actually make things slightly easier.  I had said: "I am guessing that perhaps each of the two original PE companies will constitute one of the two share classes." and that seems to be true, based on your new information.

There will be plenty of time to sort things out once the details firm-up.  Feel free to post back with any questions or concerns.

Frankx

q_lurker

Two different share classes need to be treated as two different securities - different names (denoting class clearly) and two different tickers so that Quicken maintains two different price history records.