What was the effective date of the Merger with AirTouch Communications Inc?
30 June 1999.
What was the final Merger consideration?
- Holders of AirTouch common stock receive 0.5 shares of Vodafone ADS plus $9 in cash for each share of AirTouch common stock they own.
- Holders of AirTouch Class B preferred stock receive 0.403 shares of Vodafone ADS plus $7.25 in cash for each share of AirTouch Class B preferred stock they own.
- AirTouch Class C preferred stock remains outstanding, however the company has an option to call the shares beginning 20 September 1999. Once called, the holder has the right to receive 0.690 shares of Vodafone AirTouch ADS plus $12.41 in cash for each AirTouch Class C preferred share held.
What was the market value of the merger consideration?
Based on the closing stock price of Vodafone ADS on 29 June 1999 the market value of the merger consideration is calculated as follows:
- Closing price of Vodafone ADS times 0.5 plus $9
- Closing price of VOD ADS = $197
Calculation of the value of the merger consideration:
$197 times 0.5 = $98.50 plus $9 = $107.50
What are the tax consequences of the Merger?
This information does not address all aspects of US federal income taxation or United Kingdom taxation that may be relevant to stockholders in light of their particular circumstances, or to stockholders who are subject to special provisions of US federal income tax law. Vodafone recommends that stockholders consult a tax advisor.
- The receipt of Vodafone AirTouch ADSs by the holders of AirTouch common stock and by holders of AirTouch Class B preferred stock is tax free.
- The receipt of cash by the holders of AirTouch common stock and by holders of AirTouch Class B preferred stock is taxable to the extent of your gain.
- The conversion of AirTouch Class C preferred on or after 30 June 1999 is a fully taxable exchange to the extent of the holder's gain.
How do I calculate the tax consequences?
Please review pages 65-73 of Proxy for details. $9 in cash is taxed as a capital gain to the extent of your gain - short-term if held less than 1 year, long-term if held 1 year or more. Cash in lieu of fractional shares less the proportion of the holder's tax basis that is allocable to the fractional shares will be taxed as a capital gain or loss.
To calculate the aggregate capital gain to be recognized and the new basis in Vodafone AirTouch ADSs, go through the following steps for each block of shares purchased:
1. Per Share market value of merger consideration $107.50
2. Number of AirTouch shares held on the effective date
3. Multiply line 1 and 2 to determine aggregate merger consideration
4. Enter aggregate AirTouch adjusted tax basis
5. Subtract line 4 from line 3 to determine realized gain
6. Multiple line 2 by $9 to determine aggregate amount of cash received
7. If line 5 is greater than line 6, basis in new Vodafone AirTouch shares is equal to line 4 and the holder should recognize the full amount from line 6 as a capital gain.
8. If line 5 is less than line 6 but not negative then:
a) Add line 4 & 5 and subtract line 6 to determine aggregate basis in new Vodafone AirTouch shares
b) The amount on line 5 represents the amount of capital gains to recognized
9. If merger consideration is less than the AirTouch adjusted tax basis, the cash received is considered a return of capital and the new basis is equal to the AirTouch adjusted tax basis less the cash received.
How will a fractional share be treated?
Stockholders will receive cash in lieu of a fractional Vodafone ADS. The difference between the amount of cash received in lieu of a fractional ADS and the proportion of the holder's tax basis that is allocable to the fractional share will be a capital gain or loss.
What is the AirTouch adjusted tax basis?
This is the price paid to purchase stock in AirTouch. If AirTouch stock was received in the spin-off from Pacific Telesis, the basis is 39.83% of the Pacific Telesis basis.
What should I do if I have not received my shares/cash entitlement since the merger?
Please contact Equiserve on +1 800 726 9732
My shares have been exchanged but I need some information regarding my stock since the merger, what should I do?
Please contact The Bank of New York on +1 800 233 5601
Who are the exchange agents?
By mail:
Computershare
Corporate Actions
P. O. Box
Providence, RI 02940-3014
Computershare
Corporate Actions
250 Royall Street
Canton, MA 02021
For Assistance please call:
Within the US, Canada and Puerto Rico:
1-800-546-5141
Outside the US, Canada and Puerto Rico:
1-781-575-2765.
Who are the transfer agents?
The Bank of New York
Investor Relations Dept
P.O. Box 11258
Church St. Station
New York, NY 10286-1258
USA
Telephone: 800 233 5601 (US toll free)
Telephone: +1 212 815 3700 (International)