Reynolds completed its merger with Lorillard on 6/12/2015 for cash and Reynolds stock.
The SEC filing for this merger can be found at through the Reynolds web site at:
https://d1lge852tjjqow.cloudfront.net/CIK-0001275283/77f15b01-7214-439c-a28e-95256936d121.pdf
This link will open a PDF version of the S-4/A filing dated 12/12/2014.
This merger is a cash plus stock reorganization, which for tax purposes is treated as a sale of Lorillard, with some of the proceeds used to purchase Reynolds. All the information below is from the information available from the S-4/A filed with the SEC.
1. Sell Transaction
The total merger consideration is $71.4448 per Lorillard share. This is $50.50 in cash and $20.9448 in Reynolds shares (.2909 x 72.00). The opening price of Reynolds on the merger completion date was $72.00. Calculate the total value received by multiplying 71.4448 by the total shares of Lorillard owned.
Sell all shares of Lorillard.
Total Proceeds = [71.4448 x (# of Lorillard shares owned)] – (Reorganization fee).
Use the Suspense account to receive the sale proceeds.
Date this transaction 6/12/2015.
2. Transfer Cash Received
Transfer from the Suspense account to the Broker account (or bank if appropriate), all cash received from the merger transaction. Do not include the cash from the sale of fractional shares. This will be the amount of the $50.50 per Lorillard share. 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 Reynolds shares you received in this merger. If you were charged a reorganization fee decrease the amount transferred by the amount of the fee. The total in this case will be [50.5 x (# of Lorillard shares owned)] – (Reorganization fee).
3. Buy Transaction
Enter a buy transaction for the number of Reynolds shares entitled to receive in this merger. This will be .2909 x (# of Lorillard shares owned). For example if you owned 100 Lorillard shares then enter 29.09 shares purchased (.2909 x 100).
Date the transaction 6/12/2015. 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 (20.9448 x # of Lorillard shares owned). For example, if you owned 100 Lorillard shares, then the total purchase cost would be 2094.48
Choose the Suspense account as the source of funds for the purchase.
Save the buy transaction.
4. Fractional Share Sale
The fractional shares received in this merger will likely be sold by your broker.
Enter a Sell transaction for the fractional shares dated 6/13/2015. The share amount will be the NON-whole part of the shares bought in the buy transaction above. For example, if you owned 100 Lorillard shares then you entered 29.09 Reynolds shares purchased. You would sell .09 shares in this Sell transaction.
The total proceeds will be the cash-in-lieu amount listed on your broker statement.