MERGER: Ensco and Pride

Issue: How do I enter the Ensco merger with Pride?

Cause: Ensco completed its merger with Pride on 5/31/2011 for cash and Ensco stock.
Information for Pride shareholders concerning this merger can be found at the Ensco web site at:
http://www.enscous.com/Theme/Ensco/files/Pride/Taxable%20Event_v001_t42n0d.pdf
The SEC filing can also be found through the Ensco web site at http://ensco.q4cdn.com/9b42ad20-f06a-491d-9036-e67c43718ff0.pdf?noexit=true

Resolution:
This merger is a cash plus stock merger. It is a taxable acquisition type merger. For tax purposes this is treated as a sale of Pride and the proceeds used to purchase Ensco. All the information below is from the information available from the S-4 filed with the SEC and information found on the Ensco web site.

1. Sell Transaction
The total merger consideration is $41.0763 per Pride share. This is $15.60 in cash and $25.4763 in Ensco shares ($53.32/share x .4778 shares). Calculate the total value received for your Pride shares by multiplying 41.0763 by the total shares of Pride owned.
Total Proceeds = [41.0763 x (# of Pride shares owned)] – (Reorganization fee, if any).
Use the Suspense account to receive the sale proceeds.
Date this transaction 5/31/2011 (If you use this date as a valuation date, you can move the date forward or back a day to either, 6/1 or 5/30.)

2. Transfer Cash Received
Transfer from the Suspense account to the Broker account (or bank if appropriate), all cash received from this transaction. This will be the sum of the $15.60 per Pride share plus any cash-in-lieu received for fractional shares of Ensco. If your Suspense account balance was zero when you entered the sell transaction above, then the balance after transferring the cash received will be the total purchase price of the Ensco shares you received in this merger in the next step.

3. Buy Transaction
Enter a buy transaction for the WHOLE number of shares received in this merger.
Date the transaction 5/31/2011. The total purchase price will be the amount remaining in the Suspense account, if the Suspense balance was zero when this process was started. The amount should be (41.0763 x # of Pride shares owned) – (all cash received from this transaction, including cash-in-lieu of fractional shares) – (any reorganization fee charged by your broker).
The share price should be close to the 53.32 Ensco share price on 5/31/2011.
Save the buy transaction and the entries needed to complete this merger are done.