MERGER: Excel Maritime Carriers (EXM) and Quintana Maritime (QMAR)

Issue:

On 4/15/2008, Quintana Maritime Limited (QMAR) was merged into Excel Maritime Carriers Ltd (EXM).

Cause:

This merger is not a typical cash plus stock reorganization. It is a completely taxable transaction. This opinion can be verified by reading the documents at:
http://secfilings.nyse.com/filing.php?doc=1&attach=ON&ipage=5525017&repo=tenk

For each QMAR share, shareholders received $13.00 in cash and 0.3979 shares of EXM common stock. Please note that, originally, the exchange rate was to be $13.00 in cash and 0.4084 shares of EXM stock.

Resolution:

This merger will be accounted for as a sale of the QMAR stock and a purchase of EXM stock. The total merger consideration can be computed as the sum of the cash received plus the value of the EXM shares received plus any cash received in lieu of fractional shares. EXM closed at $29.07 on 4/15/2008. Multiply the number of whole shares of EXM received by $29.07. This is the value for EXM shares received. To that figure, add the cash received at $13.00 for each QMAR share. Finally, to that figure add any cash received in lieu of fractional shares. This is the total merger consideration.

First, enter a sale of all QMAR stock for the total merger consideration computed above. Then, enter a purchase for the whole number of EXM shares for the value of such EXM shares received, as computed above.

If the broker charges a Reorganization Fee, you can either deduct that as a commission against the sale of the QMAR stock, or add it as a commission on the purchase of the EXM shares.