UGI Corp completed its merger with Amerigas Partners on 8/19/2019. APU shareholders had 3 options, all cash, all UGI stock or a combination of cash and UGI stock. The all cash option was oversubscribed and APU shareholders who chose the all cash option will receive a combination of UGI stock and cash. The prorated cash and stock amounts for the all cash option were not available when these instructions were written.
A copy of Form S-4/A filed with the SEC for this merger can be found through the UGI Corp web site at:
https://d18rn0p25nwr6d.cloudfront.net/CIK-0000884614/b70a7c2b-63bb-4762-bd4e-dc8daac49255.pdf
This merger is a cash-plus-stock reorganization. This is a fully taxable merger. For tax purposes this is treated as a sale of Amerigas Partners for the value of the cash and stock received. Some of the proceeds from the sale (the value of the stock received) is used to purchase UGI Corp. These directions use information available from the form S-4/A filed with the SEC.
Since there were multiple merger consideration options, the value of the stock or cash and stock received are different for different options. If you are not sure which option to use, check with the broker to confirm whether the All Shares or Cash and Shares option was chosen. The first instructions are for users of the desktop software, Club Accounting 3. Instructions for Myiclub.com users follow later in this document.
Transfer from the Suspense account to the Broker account (or bank if appropriate), all merger consideration cash received from this merger transaction. This will be the amount of the $7.63 per Amerigas Partners share minus any reorganization fee charged. If your Suspense account balance was zero when you entered the sell transaction above, then the balance after transferring the merger cash received will be the total purchase price of the UGI Corp shares you received in this merger. For example, if you owned 100 Amerigas Partners shares your cash portion of the merger consideration was $763.00 – reorganization fee ([7.63 x 100] –reorganization fee).
Enter a buy transaction for the number of UGI Corp shares you were entitled to receive in this merger. For the All Share option this will be .6378 x (# of Amerigas Partners shares owned). For example if you owned 100 Amerigas Partners shares then enter 63.78 UGI Corp shares purchased (.6378 x 100). The total cost will be the same as the total sale proceeds of Amerigas, 30.7611 x # of APU shares owned before the merger.
Date the buy transaction 8/19/2019.
If you elected the ALL SHARES OPTION use *only* the instructions for Club Accounting 3, above.
Use the Merger with cash security transaction if you elected the CASH AND SHARES OPTION.
Step 1. Choose Amerigas Partners (APU) as the merging company and date the transaction 8/19/2019.
Step 2. Select the option Transaction is fully taxable. Enter the following additional information:
Other fields should auto-fill from the information already entered.
Note: In Merger with cash transactions, realized capital gains and the cost basis of the new shares have a component dependent on the price per share entered in the entry screens. In our experience brokers tend to use the price per share published by the companies on their websites in their guidance to shareholders. If the companies publish guidance with a share price, we use that share price in our instructions to minimize possible differences between the accounting records and broker information. In cases where no guidance is available, we will choose the lower of the opening or closing price on the effective date. Either of these prices is acceptable to the IRS and by choosing the lower price some realized capital gains will be deferred to a later date. However, there is always the chance the price we choose will not be the price chosen by your broker. The gain from the merger and cost basis of the new shares recorded in your accounting records will then differ from your broker information. Because of the lack of detail in the tax code, both our choice and your broker’s choice would be reasonable estimates of market value for the shares received. Your records are NOT incorrect because they differ from your broker. Tax return forms do have specific areas to report these usually small differences. Our tax printer software handles these adjustment entries automatically in the normal operation of the software.
