Just Eat Takeaway (GRUB) merger with GrubHub (GRUB)
Just Eat Takeaway completed its merger with GrubHub on 6/15/2021 for Just Eat Takeaway American Depository Shares (ADS). Just Eat Takeaway then changed the ticker symbol of its ADS shares to GRUB, the symbol used by GrubHub before the merger.
The SEC filing for this merger can be found through the SEC EDGAR web site. It is the F-4 filing from Just Eat Takeaway filed May 12, 2021. The F-4 filing also gave the ratio of Just Eats Takeaway (Amsterdam) to the GRUB shares. One Just Eats Takeaway (Amsterdam) share equals 5 new GRUB shares. The Amsterdam exchange is the home country exchange for Just Eats Takeaway.
Resolution:
The companies plan to structure the merger so it is a non-taxable event. We will assume they are successful. This merger is complicated by the fact that the surviving company will use the ticker symbol of the non-surviving company. The information below is based on the information available from a form F-4 filed with the SEC. Price information is from websites offering historical prices.
NOTE: The companies state they will endeavor to satisfy the conditions necessary to make this transaction non-taxable. However, they also state there is the possibility the IRS will disagree with their characterization. These instructions assume the companies succeed in their efforts. New instructions will be written, if and when it becomes known the merger should be treated as a taxable event.
The myICLUB accounting software uses ticker symbols to identify companies. With the surviving company using the ticker symbol of the non-surviving company this allows for this transaction to be entered in 2 different ways and meet the tax consequences of the merger. Both methods will be described. Users can choose the method depending on how they wish Valuation Statement return figures will be calculated.
Ideas for deciding which method to use.
Method 1 – Use this method if you believe the combined company is similar enough to GrubHub that tracking the returns from the first GrubHub purchase makes sense. Or, you are indifferent to the return tracking and just want the easiest method to complete this merger.
Method 2 – Use this method if you believe the combined company is different enough to track its performance starting on the merger date. This includes believing that management has changed significantly enough to warrant tracking performance starting with the date of the merger.
For GrubHub shareholders
Method 1 - The first method for GrubHub shareholders is to treat this as a stock split. While the F-4 filing states old GRUB holders receive 0.6710 Just Eats Takeaway shares. This represents the home country shares, not the ADS shares. To get the ration of old GRUB to new GRUB shares, the exchange ratio must be multiplied by the ratio of new GRUB to home country shares. This ratio is 5 new GRUB shares = 1 Just Eats home country share. Using this method, the return calculation for GRUB will begin with the first purchase of GrubHub. Here is the information needed to complete the merger using this method.
Use the Stock Split transaction.
Date : 6/15/2021
Split Ratio : 3.355 for 1 (0.6710 Just Eats shares x 5 GRUB shares per Just Eats share.)
Cash Received : Use the cash-in-lieu amount from your broker statement or online information.
Update the Security profile so that the name associated with the ticker symbol GRUB is Just Eat Takeaway.
Method 2 - The second method for GrubHub shareholders is to treat this as two mergers. The extra merger transaction is to prevent ticker symbol confusion. (The software does not allow the merger of 2 companies with the same ticker symbol.) Using this method, the return calculation for GRUB will begin on the final merger date, as if Just Eat Takeaway was purchased on that date. Here is the information needed to complete the merger using this method.
The Merger Entry Go to Transactions > Merger or Accounting > Securities > Record merger of securities depending on the version of the software being used. If you are unfamiliar with merger transactions you can get help at this URL: http://www.iclub.com/support/kb/default.asp?page=normal_merger
Here is the information needed for GrubHub shareholders to complete the first merger.
Date: 6/14/2021
Old Security or Merging Company: GrubHub (GRUB)
Price per share of old Security / : Use last GRUB valuation, if needed
Cash received: Do not enter anything here
New Security: Merger Sub (MERGE) This is a made-up company
New Security Price: 18.55 (Closing price of GRUB on 6/15/2021)
Shares received : 1.0 x (# of GRUB shares owned).
(Remember to include fractional shares.)
For example, if you owned 100 GRUB shares, you should receive 1.0 x 100 = 100 MERGE shares.
Save the transaction and the first merger has been entered.
Here is the information needed for GrubHub shareholders to complete the merger with Just Eat Takeaway. Remember, Merger Sub (MERGE) is just a way to avoid merging two companies with the same ticker symbol. It is a convenient substitute for GrubHub with a different symbol.
Date: 6/15/2021
Old Security or Merging Company: Merger Sub (MERGE)
Price per share of old Security / : Use last GRUB valuation, if needed
Cash received: See your broker statement for cash-in-lieu for the GRUB merger.
New Security: Just Eat Takeaway (GRUB)
New Security Price: 18.55 (Closing price of GRUB on 6/15/2021)
Shares received : 3.355 x (# of original GRUB shares owned).
(Remember to include fractional shares.)
For example, if you owned 100 original GRUB shares, you should receive 3.355 x 100 = 335.5 new GRUB shares. (This new GRUB is now Just Eat Takeaway ADS shares.)
Save the transaction and the merger has been completed.