club_cafe: Tellabs Acquisition of Advanced Fibre

iras1 on

This is not a merger. According to the Prospectus, the transaction is fully taxable to shareholders of AFCI. What you need to do is the following:

First, determine the value of .504 share of TLAB as of the time of the merger. It's not clear from the information I see online as to when the effective date of the merger was, so you may need to contact TLAB's IR department. Then calculate the value of 12.6 shares of TLAB and add $300 to that to get the total value received. Enter a sale of AFCI for the total value received. (Include any sale commission that Ameritrade charged, but not the reorganization fee.)

Then enter a purchase of 12.6 shares of TLAB for the calculated value of the 12.6 shares (that is, $300 less than the sale proceeds you recorded in the AFCI transaction). Record the $20 reorganization fee as a commission on the purchase (along with any purchase commission that Ameritrade charged).

Finally, enter a sale of 0.6 shares of TLAB for whatever cash-in-lieu you received. You may not have this amount yet.

Ira Smilovitz

In a message dated 12/3/2004 2:15:49 P.M. Eastern Standard Time, jrbaxa@bivio.com writes:

I need help on how to do the accounting on an acquisiiton
with both a share and cash buyout.

On 12-2-2004, Tellabs acquired Advanced Fibre Communications
by paying $12 a share cash and issuing .504 TLAB shares for
each AFCI share. Since our club owned 25 shares of AFCI, we
ended up with $300 in cash and 12 shares of TLAB.
Ameritrade also charged us $20 for a REORGANIZAION FEE,
which I assume can be expensed somewhere in the BIVIO
transaction (?).

Under the ACFI investment entry in BIVIO, I tried doing a
MERGER transaction, but could not figure how to get the $300
cash into the function-- there were no fractional shares in
the accounting provided by Ameritrade:

12-02-2004 Buy or Sell Security SELL 25.000 SHARES @ 12.00
300.00

12-02-2004 Miscellaneous Corporate Action MANDATORY REORG
FEE -20.00

12-02-2004 Receive Stocks In REORG - .504:1 EXCHANGE
12/02/04 TO TELLABS INC 879664100 -0.00

If I sell the ACFI stock first (before the MERGE), there are
no shares left for the MERGE activity.

Thanks for the assistance.
--JB

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