How to account for stock merger in MS Money?

November 8, 2009 7:04 AM

Looking for a Microsoft Money/ Quicken expert - or any smart accounting/finance person, really - to help me figure out how to document the recent Pfizer-Wyeth merger in MS Money.

Pfizer merged with (acquired) Wyeth on Oct. 15. Eligible shareholders received $33 cash and .985 shares of Pfizer for every share of Wyeth we held, plus a cash payout for any fractional shares.

In MS Money, do I

- Sell Wyeth and Buy Pfizer? If so, at what prices - the closing prices on 10/15 ($17.66 PFI, $50.39 WYE)?

or, do I

- Remove Shares of Wyeth and Add Shares of Pfizer? If so, how do I account for the $33/share of cash?

Also, how do I document the fractional share payout?

I found these FAQs on the Pfizer webpage http://media.pfizer.com/files/investors/shareholder/Pfizer_Wyeth_FAQ.pdf and this question-and-answer on a different forum http://www.rockryno.com/quicken/How-do-I-handle-the-recent-merger-of-Pfizer-and-Wyeth-19406-.htm, but I'm still not sure I understand the mechanics of recording this in Money.

Thanks in advance for your help. This is making my head hurt.

posted by Sweetie Darling to Work & Money (4 answers total)

You're not buying and selling shares. You're essentially being made whole by Pfizer, which acquired your stake in Wyeth. Pfizer's payment to you for your Wyeth shares are in the form of Pfizer equity (at the aforementioned ratio) plus cash for the fractional shares leftover.

That said I don't know how Money or Quicken works. But you're definitely not buying or selling anything.
posted by dfriedman at 7:16 AM on November 8, 2009

This may be helpful: http://www.accountantforums.com/do-handle-recent-merger-pfizer-and-wyeth-t108702.html
posted by dfriedman at 7:19 AM on November 8, 2009

Response by poster: dfriedman, the link you provided is the same as the one I referred to on rockryno.com (not sure why they are showing up in two different places), but I'm still not sure I get it.

The gentleman who answered that forum question does say "Note the key phrase 'will be a taxable transaction.' This means that you SOLD [his caps, not mine] your Wyeth shares."

Looking at his math, which includes the cash, "purchased" PFI shares and fractional payout, it looks like the sales price he comes up with does equate with Wyeth's closing price on 10/15, $50.39. I guess I will try it that way and see if it all adds up, or if I can back my way into it.
posted by Sweetie Darling at 7:39 AM on November 8, 2009

Interesting. Most of these deals are structuredto be tax-free. I guess they're screwing you over.

Unfortunately as I don't know the software I can't really provide more help. Sorry.
posted by dfriedman at 7:50 AM on November 8, 2009