Pfizer spinoff exchange offer with odd lot provision

  • Company: Pfizer Inc
  • Ticker: PFE
  • Market Cap: 206B
  • Size of Action: 80% of Zoetis (ZTS) or ~13.7B
  • Type of Transaction: Spinoff exchange offer with odd lot provision
  • Current Price: $27.50 as of June 4th
  • Exchange Price: up to 0.9898 shares of Zoetis common stock per share of Pfizer common stock. Based on average price of ZTS June 17/18/19. (daily volume-weighted average prices) or VWAP is being tracked here:
  • Potential Gain (%): 7.52%
  • Expiration: Midnight June 19, 2013
  • Tender Limit (Shares): 99
  • Max Investment ($): $2,722
  • Max Gain ($): $205
  • Sec Filing:
  • Sec Filing Link
  • Summary: Pursuant to the exchange offer, for each $100 of shares of Pfizer common stock accepted in the exchange offer, holders of Pfizer common stock will receive approximately $107.52 of shares of Zoetis common stock, subject to an upper limit of 0.9898 shares of Zoetis common stock per share of Pfizer common stock (the “upper limit”).  The average value of the two stocks for purposes of calculating the exchange ratio will be determined by reference to the simple arithmetic average of the daily volume-weighted average prices (“VWAP”) of Pfizer common stock and Zoetis common stock on the New York Stock Exchange (the “NYSE”) during the three consecutive trading days ending on and including the expiration date of the exchange offer (the “Averaging Period”), which will be June 17, 18 and 19, 2013, unless the exchange offer is extended. The Averaging Period will not change, however, if the exchange offer is extended solely as a result of the automatic extension triggered by the upper limit.
  • Odd Lots:  If the exchange offer is oversubscribed and Pfizer cannot accept all tenders of Pfizer common stock at the exchange ratio, then all shares of Pfizer common stock that are validly tendered will generally be accepted for exchange on a pro rata basis in proportion to the number of shares tendered. We refer to this as “proration.” Stockholders who beneficially own “odd-lots” (less than 100 shares in the aggregate) of Pfizer common stock and who validly tender all their shares will not be subject to proration (other than participants who hold odd-lot shares as a participant in certain Pfizer savings plans), assuming such stockholders request such preferential treatment in the letter of transmittal.
  • Notes: Although the official exchange rate has not yet been set, Pfizer shareholders who tender their shares will receive roughly a 7.5% premium and have their shares converted (pro-rated unless an odd lot) into ZTE.  If you buy in early your return may vary based on market risk but the exchange offer is nearly certain to go through.
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