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MERGER: RehabCare Group and Kindred HealthCare

This transaction is entered as three transactions. The first is a sell transaction for RHB. Next is a cash transfer transaction. The transfer is not necessary but adding this transaction and using the Suspense account may make some calculations easier. The last is a buy transaction for KND.

1. The Sell
The value received in the sale of RHB is the sum of the cash received and the value of the KND shares received. The result is then multiplied by the number of shares of RHB owned. This is calculated at 37.62 per shares.
The components are
$26 cash plus $11.62
The amount $11.62 is calculated from the exchange ratio of RHB shares to KND shares received and the opening price of KND on the merger close date of 6/1/2011.
(.471) x 24.68 = 11.6243 rounded to 11.62.

Transaction date: 6/1/2011
Select Account: Suspense (This is not necessary but may help later.)
Security: RehabCare Group (RHB)
Sale Total: 37.62 x (# of RHB shares owned). For example, if you owned 100 RHB shares, your sale total would be 3762.00.
Commissions and Fees: if your broker charged a reorganization fee enter it here.

2. The Transfer Cash
This transaction helps keep track of the cash received separately from the value of the shares received. You can make the purchase amount calculation manually and skip this section.

Transaction date: 6/1/2011
Amount of Transfer: Transfer the total of all cash received in this transaction. This will be equal to 26 x (# of RHB shares owned) + cash in-lieu of fractional shares. For example, if you owned 100 RHB shares, then you should have received $2600 as the cash part of the merger consideration. In addition, cash in-lieu of .1 KND share should be added. If we assume the cash in-lieu was 2.48, then the total cash received would be 2602.48.
Transfer from: Suspense To: broker account
If you used the Suspense account to receive the proceeds of the sale above, after the transfer the total left in the Suspense account will be the total amount paid for the KND shares you received in this merger.

2. The Buy
Transaction date: 6/1/2011
Account: Suspense
Security: Kindred HealthCare (KND)
Number of Shares Bought: Enter the WHOLE number of shares received.
Net Total of Purchase: (Sale total – all cash received). See parts 1 and 2 above.
If you used the Suspense account for the sell and transfer transactions above, the amount remaining in the Suspense account will be the correct amount. This assumes the balance in the Suspense account was zero when you started.



 
  
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