Author Topic: Allergan PLC (AGN.XNYS) Delists  (Read 741 times)

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Offline Vincent Duggan-Jones

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Allergan PLC (AGN.XNYS) Delists
« on: 12/05/2020, 02:19:31 PM »
Dear Valued Members,

Please be aware that due to the acquisition of Allergan PLC (AGN.XNYS) by AbbVie Inc (ABBV.XNYS), Allergan has been removed from the list of stocks for SPA3 Investor in the USA.

AGN.XNYS has delisted from the exchange as an open trade in the SPA3 Investor methodology. Members who have taken this position in their portfolios should see these stocks automatically converted to ABBV.XNYS by your stock broker. You are advised to sell your holdings of ABBV.XNYS in today's session.

ABBV.XNYS will not be added to the list of stocks for SPA3 Investor in the USA as there is not enough data available to perform adequate back-testing.

The changes have been reflected in Beyond Charts and the alerts app has been updated.

Please feel free to contact us if you would like further information.

Thank you,

Vincent Duggan-Jones

Offline Karen Glover

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Re: Allergan PLC (AGN.XNYS) Delists
« Reply #1 on: 12/05/2020, 08:40:56 PM »
Is there any special way to record this?  Or is just sell of AGN, buy and sell of ABBV?  Seems obvious I know but i'm thinking maybe not that simple  ;)
Cheers, Karen

Offline Gary Stone

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Re: Allergan PLC (AGN.XNYS) Delists
« Reply #2 on: 12/05/2020, 09:43:01 PM »
Karen,

AGN has been delisted so it will longer be in one’s portfolio.

The broker platform should have executed the conversion from AGN to ABBV. So ABBV will now be shown as an open trade with the adjusted quantity to the equivalent value of the AGN holding.

ABBV does not have a SPA3 Investor TSL so it should be sold immediately.

So all that is required to follow the SPA3 Investor rules is to sell ABBV ASAP. The Public Portfolios will be selling on the open in Tuesday’s session.

Regards,
Gary
On the journey

Offline Jurgen Paetz

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Re: Allergan PLC (AGN.XNYS) Delists
« Reply #3 on: 13/05/2020, 06:34:07 PM »

Karen i was pondering the same thing as there is the cash component to the merger.  In theory you would have to account for the cash component because it was a settlement for shares (ABBV) plus cash.  Effectively we SOLD AGN for $120.3 (but that would show a loss which is not really the case in reality) and paid $0 for ABBV.  I seem to recall something like 0,866 ABBV shares plus $120.3 cash for every AGN share. 

I sold ABBV at $90 last night (according to my Trading Plan i don't hold stocks obtained from a merger that are not in the SPA3 Investor list of Applicable stocks) and recorded the sale in the normal way with brokerage (since this time i paid brokerage).

Since the settlement was for cash plus shares we could account for the cash component as an Adjustment; namely "Cash injection" in TradeMaster.  However we have to be careful here as we effectively obtained ABBV for $0 already.  Mmmmmm ?? 

Lets see if anyone else can throw some light on the subject.




 

« Last Edit: 13/05/2020, 07:57:51 PM by Jurgen Paetz »

Offline Gary Stone

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Re: Allergan PLC (AGN.XNYS) Delists
« Reply #4 on: 15/05/2020, 09:28:07 AM »
Jurgen,

Quote
I seem to recall something like 0,866 ABBV shares plus $120.3 cash for every AGN share.

This is correct.

Quote
Since the settlement was for cash plus shares we could account for the cash component as an Adjustment; namely "Cash injection" in TradeMaster.  However we have to be careful here as we effectively obtained ABBV for $0 already.  Mmmmmm ??

You should avoid putting a cash injection into TradeMaster as it changes the Return on Capital Invested and Compounded Annual Return numbers in the Portfolio, Current Status, Summary screen.

Over 2 different broking platforms I have calculated that Buying AGN at $185.71 and Selling equivalent quantity that the brokers allocated to ABBV at $90 wil result in a 6.7794% profit on the trade. Before brokerage.

This is what I have entered into TradeMaster for three real-money portfolios that held an allocation of AGN.

Regards,
Gary
On the journey

Offline Nick Rossetto

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Re: Allergan PLC (AGN.XNYS) Delists
« Reply #5 on: 24/05/2020, 03:04:18 PM »
Thanks Gary - just on the point about adding funds to Trademaster - how does one reflect wanting to increase portfolio size? Do you run a second TradeMaster portfolio?

Offline Dave McCulloch

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Re: Allergan PLC (AGN.XNYS) Delists
« Reply #6 on: 26/05/2020, 10:14:17 AM »
Hi Nick,

In terms of adding capital to an existing portfolio it is fine to use the cash injection method and to make a comment against that "transaction". 

Gary's comment re the cash injection was more to do with trying to use a cash injection to deal with takeovers, and how TM looks at that injection and the impact on measuring the portfolio's returns etc.

Hope this makes sense Nick.

Regards,

David.

Offline Nick Rossetto

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Re: Allergan PLC (AGN.XNYS) Delists
« Reply #7 on: 26/05/2020, 01:16:17 PM »
Thanks David - yes I was wondering how you would accurately measure Iain's portfolio with regular contributions being added.

Cheers

Nick

Offline Karen Glover

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Re: Allergan PLC (AGN.XNYS) Delists
« Reply #8 on: 26/05/2020, 10:41:28 PM »
Thanks everyone, but i'm still a little confused
AGN has gone from my trading portfolio and yes, I sold ABBV straight away, but i'm still not sure how to enter in Trademaster.
This seems to be the outcome:
Sold 73 AGN @ 184.00
Merger outcome 63 ABBV @ ?  (US$8781.90)
Then sold 63 ABBV @ 90.00 (US$5662.87)
Sorry I haven't had one of these before, how do I put this into Trademaster ?   
I've recorded the sale of AGN @184, but not sure how to record buy of ABBV?   :confused:

Offline Dave McCulloch

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Re: Allergan PLC (AGN.XNYS) Delists
« Reply #9 on: 27/05/2020, 12:56:22 PM »
Hi Karen,

I think the easiest way to to deal with this is to edit the sale details of AGN.

The net proceeds of the takeover (any cash and sale of ABBV) need to be incorporated into the sale of AGN.

 ($8781.90 + $5662.87) = $14444.77

$14444.77 divided by 73 AGN shares = $197.87

So, you'll just need to edit the sale price from $184.00 to $197.87 and add a comment (Merger with ABBV, Cash component and shares)

Hope this makes sense.

Regards,

David.

Offline Karen Glover

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Re: Allergan PLC (AGN.XNYS) Delists
« Reply #10 on: 28/05/2020, 12:23:39 AM »
Yes much simpler - thanks Dave  :)

Offline Gary M

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Re: Allergan PLC (AGN.XNYS) Delists
« Reply #11 on: 02/06/2020, 09:46:34 PM »
I held 58 shares in AGN and sold them for USD11,396 when they were taken over / delisted. My online broker, Saxo, has taken USD 2,066.29 from my cash balance as a result of the sale giving the following reason:
Dear client,
You could check your account statement under Historical Reports.
It was the Tax Charged for AGN:xnys MRGR IE00BY9D5467 GR 8408189 302.
We will now send to our concerned team to provide more information.

Has anyone encountered a similar problem as it doesn't seem right to me

Offline Gary Stone

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Re: Allergan PLC (AGN.XNYS) Delists
« Reply #12 on: 03/06/2020, 11:57:53 AM »
Gary,

Quote
It was the Tax Charged for AGN:xnys MRGR IE00BY9D5467 GR 8408189 302

I don't think that this is a correct answer.

Looking at the movements in my SAXO account it looks like this is how SAXO handled it:
1. Sold AGN for the same price at which I bought AGN. Cash neutral at this point
2. Deducted cash out of my account to buy ABBV
3. Bought a certain quantity of ABBV that matched the arithmetic of the merger.

I then sold ABBV.

The difference between the cash removed to buy ABBV and the cash returned as a result of the sale of ABBV was a profit.

I then re-engineered what the equivalent AGN price would have been to produce that profit, net of brokerage.

Hope that helps.

Regards,
Gary
On the journey

Offline Gary M

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Re: Allergan PLC (AGN.XNYS) Delists
« Reply #13 on: 04/06/2020, 03:25:49 PM »
Gary, Thanks for your reply but could you have a look at my Saxo transactions re AGN and ABBV and tell me what you think.
Cheers
Gary

Offline Gary Stone

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Re: Allergan PLC (AGN.XNYS) Delists
« Reply #14 on: 04/06/2020, 07:02:17 PM »
Gary,

I think that SAXO has got it wrong.

See attachment.

By my calculations, the buy and sell prices for AGN are estimated from the Face Value of the transactions.

Resulting in a profit of roughly $539.56.

Tax on the profit would 388%. What else could the tax be charged on?

I don't have a 'Tax Charged' line item in my account.

I would continue querying this. SAXO's response is thin. Have you heard back from their "concerned team"?

Regards,
Gary

On the journey