Pfizer (PFE) – Odd Lot Exchange Transaction – $217 potential

Current Price – $29.11

Offer Price – $107.52 stock of Zoetis for $100 stock of Pfizer

Potential Gain – 7.5% or $217 for Odd Lots

Expiration date – June 19, 2013

Odd Lot holders (less than 100 shares) are not subject to proration

Trade Strategy:

Buy 99 PFE and sell short 94.3 ZTS. Lock in gain of $217. Tender PFE for ZTS. Cover short after receiving exchange shares.


Pfizer Inc. (NYSE: PFE) today announced its intention to split off its remaining interest in Zoetis Inc. (NYSE: ZTS), through an exchange offer. Zoetis, formerly Pfizer’s animal health business, completed its initial public offering (IPO) in February 2013. In the exchange offer, Pfizer shareholders can exchange all, some or none of their shares of Pfizer common stock for shares of Zoetis common stock owned by Pfizer.

The exchange offer is designed to permit Pfizer shareholders to exchange their shares of Pfizer common stock for shares of Zoetis common stock at a 7% discount, subject to an upper limit of 0.9898 shares of Zoetis common stock per share of Pfizer common stock. If the upper limit is not in effect, for each $100.00 of shares of Pfizer common stock accepted in the exchange offer, tendering shareholders would receive approximately $107.52 of Zoetis common stock. These values will be determined by the simple arithmetic average of the daily volume-weighted average price of Pfizer common stock and Zoetis common stock on the NYSE during the three consecutive trading days ending on and including the expiration date of the exchange offer, which are expected to be June 17, June 18 and June 19, 2013.

The largest possible number of shares of Pfizer common stock that will be accepted in the exchange offer equals 400,985,000 divided by the final exchange ratio.


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.

Source of Funds:

Not applicable as this is share exchange offer