ownyourfuture
Thinks s/he gets paid by the post
- Joined
- Jun 18, 2013
- Messages
- 1,561
I own a substantial number of Eli Lilly shares. They recently offered the following to shareholders.
Eli Lilly & Company (LLY) announced that it will launch an exchange offer for shareholders in order to divest its remaining ownership interest in Elanco Animal Health Incorporated ELAN. di·vest - verb - rid oneself of something that one no longer wants, such as a business interest or investment
Lilly divested its Elanco animal health unit as an independent publicly traded company - Elanco Animal Health - via an initial public offering (IPO) of a minority stake in 2018. Elanco Animal Health started trading on NYSE from Sep 20, 2018. Lilly retained 80.2% stake in the Elanco Animal Health when it completed the IPO, which it wants to divest this year.
Under the exchange offer, Lilly shareholders can exchange all, some, or none of their Lilly shares for shares of Elanco common stock owned by Lilly at a 7.00% discount.
Lilly expects the exchange offer to be tax free, except the cash received in lieu of fractional shares.
https://finance.yahoo.com/news/lilly-begin-exchange-offer-sale-143102398.html
For the following reasons, I'm probably not going to participate.
1: ELAN shares went public in September 2018 @ approximately $36.00, & are now trading under $30.00
2: LLY shares have been on a tear, up around 56.00% over the past year.
3: I'm probably oversimplifying it, but on the surface, it sounds like Eli Lily wants their own shares back, & wants to get rid of the ELAN shares.
My question: What does “Lilly expects the exchange offer to be tax free” actually mean ?
I can't believe that this would mean ‘if’ I chose to participate, the capital gains on the Eli Lilly shares I exchanged, (which are substantial) would be assigned a new cost basis ?
This sounds too good to be true, & we all know the old saying related to that.
Eli Lilly & Company (LLY) announced that it will launch an exchange offer for shareholders in order to divest its remaining ownership interest in Elanco Animal Health Incorporated ELAN. di·vest - verb - rid oneself of something that one no longer wants, such as a business interest or investment
Lilly divested its Elanco animal health unit as an independent publicly traded company - Elanco Animal Health - via an initial public offering (IPO) of a minority stake in 2018. Elanco Animal Health started trading on NYSE from Sep 20, 2018. Lilly retained 80.2% stake in the Elanco Animal Health when it completed the IPO, which it wants to divest this year.
Under the exchange offer, Lilly shareholders can exchange all, some, or none of their Lilly shares for shares of Elanco common stock owned by Lilly at a 7.00% discount.
Lilly expects the exchange offer to be tax free, except the cash received in lieu of fractional shares.
https://finance.yahoo.com/news/lilly-begin-exchange-offer-sale-143102398.html
For the following reasons, I'm probably not going to participate.
1: ELAN shares went public in September 2018 @ approximately $36.00, & are now trading under $30.00
2: LLY shares have been on a tear, up around 56.00% over the past year.
3: I'm probably oversimplifying it, but on the surface, it sounds like Eli Lily wants their own shares back, & wants to get rid of the ELAN shares.
My question: What does “Lilly expects the exchange offer to be tax free” actually mean ?
I can't believe that this would mean ‘if’ I chose to participate, the capital gains on the Eli Lilly shares I exchanged, (which are substantial) would be assigned a new cost basis ?
This sounds too good to be true, & we all know the old saying related to that.
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