Merger Arbitrage – 12% Upside
This is a merger arbitrage opportunity Australia, that appears likely to play out over the next 2-3 months.
PAR Technologies, a provider of restaurant software solutions (including point of sale, loyalty, back office, etc.), is acquiring its Australian-listed peer TASK Group. Merger consideration comes in two options, either (1) A$0.81/share in cash, or (2) up to 50% in PAR stock at 0.015x exchange ratio and the rest in cash at the same A$0.81/share. The mixed consideration results in 12% upside at current prices. There is plenty of cheap borrow is available on IB for hedging.
The transaction was announced nearly two months ago. The trading pattern of TSK since then has been quite intriguing. The stock has persistently remained quite stable around A$0.8/share (or at the cash-offer-levels), despite the significant fluctuations in PAR’s share price. This has resulted in a volatile spread to the mixed consideration. It’s almost like the market is partially overlooking/ignoring the mixed consideration option. In part, this could be due to Australian investors’ reluctance or inability to accept US-listed stock, which could contribute to the existence of this arbitrage opportunity.
Another reason driving the spread is the cross-border nature of the merger with no overlap in trading hours of both stocks. PAR is listed on NYSE, while TSK – on the Australian Stock Exchange.
The potential downside to pre-announcement levels is optically steep (50%). However, I think the risks of this merger falling apart are minimal. Shareholder meeting will take place in late-June and the transaction is expected to close in July. The scheme booklet (akin to a merger proxy document) will come out late May.
And now let’s dig into the details.
Quick intro to PAR
PAR technologies has two business segments:
- The Restaurant/Retail – provides various software, hardware, loyalty program and other solutions to more than 70,000 restaurants. The business focuses almost exclusively on the U.S. (94% of sales). The two largest clients include McDonald’s and Yum! Brands, which together generate 17% of total revenues. PAR has also recently signed Burger King with the expansion set to begin this year. The Restaurant/Retail segment generates around two-thirds of the company’s revenues and 90% of total gross margin.
- Government segment, which is completely separate/distinct from the restaurant-focused operations. This division delivers sophisticated systems and software solutions to the U.S. Department of Defense as well as other intelligence and federal agencies. The offerings encompass satellite facility operations and maintenance, IT systems, geospatial applications, unmanned aerial systems, and data science services.
PAR is looking to divest the government division and become a pure-play restaurant/hospitality software/hardware business.
Quick intro to TSK
TASK Group operates two divisions:
- Plexure – creation and operation of the international McDonald’s mobile app. The app runs in 66 markets (doesn’t include the U.S.) and processes around 150m interactions per day. It includes online ordering, digital loyalty, personalization and payment technologies. MCD is the only client. The division generates 80% of TSK’s total revenues.
- TASK division – offers transaction management platform, which includes cloud based POS, loyalty, online ordering, etc. The biggest clients are in hospitality sectors like stadiums, casinos and hotels. QSR comprises a smaller part of the business at the moment. However, TASK division has just launched a new mobile app, which is very similar to what Plexure offers for MCD, but white label. Starbucks Australia is the first customer of this new offering.
The buyer is unlikely to walk away
This is a very important strategic acquisition for PAR. Both parties have been working on it for the past 3 years. PAR Technologies is U.S. focused with its software and operations tailored for the single market. This has limited PAR capabilities to expand internationally as some brands seek a unified and centralized infrastructure across their entire franchise. This issue has become more pronounced as PAR continues to scale and win new big clients, such as the recent deal with Burger King for 21,000 locations in North America (compared to PAR’s total of 70,000). Here’s what PAR’s CEO said two months before TSK deal announcement:
Analyst
And since you mentioned M&A, is that going to be targeted on sort of filling out the product portfolio? Is it more geographic expansion?
CEO
Scale right now. Geographic expansion is the other part. When you win these enterprise deals, you’re getting forced or pushed to international more and more and more. I think if you were to ask Burger King, it is just a guess, they would have been like, “oh, gosh, I wish PAR had an International. We would have given them all 23,000 stores overnight, and we would have made a $100 million contract and not whatever it was.” We didn’t have that. We can’t deliver that.I think there’s always a long we can hold off. It also opens up a competitive threat, right? Like what if one, like our B minus competitor said, we’ve got a perfect international solution. Then somebody says, like, I’ll take B minus for everything instead of A plus and let’s see over the A plus and C over there. Like, I think we’ve got to figure that out.
And here’s more on this same topic from the recent M&A call:
I think we’ve now had enough transactions where our customers are saying, “Hey, can you take on this non-U.S. business?” And we say, no. […] I always say, today, our customers take us because the majority of their business in the United States, and we have the best product in the United States. I think as they make these massive investments internationally, we’ve got to go with them there, and we can’t just pretend that we can live in our isolated box and keep going in the U.S. and not have that impact internationally.
The merger with TASK Group, which operates mostly internationally and has one of the highest-end tech offerings on the market, is finally going to open the international markets to PAR:
On the TASK side, it’s pretty simplistic. We’re taking our U.S. customers abroad and bringing them to the TASK team. It’s a hole that we’ve had for a long time. It’s an ask that we get all the time. And we think this is a great way to bring those customers to the international markets. International markets do run relatively independent from U.S. markets, both from the way we operate, but also the way that our end market customers operate. So I think that will be very, very synergistic.
[…]
One of the most interesting aspects of our business is that today almost every one of our large customers expect more growth outside the United States than inside the United States. And having a platform now to bring our customers abroad increases our ability to win, but importantly, also allows us to help bring global brands back into the PAR [ portfolio ].
I might’ve gotten carried away a bit with the quotes there, but I wanted to emphasize this is not just some kind of a random deal of low strategic significance, focused on blind empire building. The buyout is expected to significantly expand PAR’s TAM and offer considerable cost synergies. Cross-selling opportunities have been mentioned as well, however, management hinted a few times that eventually TSK’s technology might become PAR’s primary offering, even to the US market.
The acquisition will enhance PAR’s scale and substantially boost its ARR, propelling the shift towards an asset-light SaaS business model. TSK’s business is mostly SaaS, with 95% recurring revenues, and only around 3-4% of total sales coming from hardware (displays, POS terminals, etc.). Meanwhile, PAR’s ARR stands at only 50% of the restaurant segment revenues. It has a much larger hardware business, accounting for 25% of the restaurant segment’s sales in 2023 and 40% in 2022.
The transaction will also accelerate PAR’s path to profitability. Until recently, the buyer has been generating annual adj. EBITDA loss of around $20m. As a result of recent big customer wins and progress in integrating earlier acquisitions, management was expecting to reach profitability by the year end. Merger with TSK is expected to speed this up. Notably, the buyout of TSK was announced in parallel with another, similar-sized acquisition of Stuzo (loyalty software for C-stores). Stuzo was privately held and the acquisition has already closed. Both transactions are projected to add US$82m ARR and US$20m EBITDA to PAR, out of which TSK will contribute 50% and 30% respectively. Collectively with Stuzo, that’s roughly 60% growth in ARR for the buyer. From the presentation of the mergers:
PAR is a serial acquirer with experience in handling buyouts of similar or even larger size. For example, the recently closed Stuzo buyout was for $190m vs $210m for TSK. Additionally, in 2021, PAR acquired Punchh, a provider of loyalty software for restaurants, for $490m.
The multiple paid is likely a secondary thought to PAR, given the strategic weight of this acquisition. PAR’s management noted they are thinking long term, 5-10 years, in making this deal. In the past, PAR hasn’t shied away from paying premium valuations for businesses deemed pivotal for the long-term growth. For example, Punchh was acquired at 15.6x sales. Although it was done at the peak of a very hot tech market (April 2021) and the interest rates were near zero back then, it still illustrates the point regarding PAR’s commitment to strategic investments.
Peer comparison here is challenging. PAR itself trades at around 4x pro-forma sales, although it’s not a perfect comp to TSK given the material presence of the Government segment and exposure to hardware products, both of which operate at much lower margins. Another somewhat comparable peer AGYS now trades close to 10x sales (62% revenues are recurring). However, AGYS is a much larger player ($2.2bn market cap), with a highly fragmented customer base. It is also already profitable and growing faster than PAR or TSK (excluding the MCD business).
Financing of the transaction
The merger is not contingent on financing, however, PAR apparently intends to finance a large part of the deal through divestiture of its Government segment. Here’s what the CEO said when the analyst raised financing question during the M&A call:
We don’t know the final consideration between stock and cash. We don’t know how much cash we need versus how much stock. One of the things I think we’re excited about is given the timeline to close, we expect that we’ll have flexibility on our balance sheet from some of the initiatives we have that we talked about in our 10-K. And I think that’s why we feel comfortable that as we get closer to the point of closing, we’ll be able to hopefully get this done without a meaningful change to our cap structure. So we’re very excited that we can potentially solve the majority of that or all of that from our balance sheet moving forward.
Those initiatives that the CEO referred to are indicated in this newly added text in the annual report:
As part of this evaluation, the board of directors and management periodically consider strategic alternatives to maximize value for our shareholders, including strategic transactions such as an acquisition, or a sale or spin-off of non-strategic company assets or businesses, including a sale of PAR Government Systems Corporation and/or one or more of its subsidiaries.
For several years the divestment of the Government segment + the transition into a pure-play restaurant software/hardware business has been the crux of PAR’s long thesis. It seems management is finally ready to take action. Judging from the CEO’s comment above, management seems confident about an imminent transaction and could already be in the advanced stages of negotiations with interested parties.
It’s difficult to say how much the government segment could be worth. The business is very stable and offers “mission critical” services to the defense sector. However, the margins appear to be rather tiny, especially when compared to the restaurant segment.
In the recent pitch on PAR, Voss Capital noted that anything above $125m for the Government business would be a “win”. This seems to align with the CEO’s comments that implied such transaction would cover most or all of the TSK deal.
Nonetheless, even if the disposal of government stumbles into some kind of roadblocks or delays, I think PAR wouldn’t have any issues financing the buyout with debt or by just issuing additional equity. For example, the recent Stuzo acquisition was primarily financed by a $200m equity raise (18% dilution) at $38.65/share. A lot of the current major shareholders (including the largest 4, which own 42% of PAR combined) have participated in the offering, showing confidence in the company’s current direction. The table below is from the stock registration prospectus, which outlines these shareholders and the amount of PAR shares they’ve acquired offering.
I think that PAR’s decision to proceed with TSK’s buyout without making it contingent on financing is also a clear sign that management does not see any risks with it.
Other merger conditions
The buyout is subject to several other conditions, all of which are likely to pass easily.
- Regulatory approvals. The merger will need approval from the foreign investment regulators of Australia and New Zealand—the FIRB and OIO. However, this should be a mere formality. The target company is relatively small and generates just 17% of its total sales from Australia and New Zealand. Additionally, the business is not involved in any sectors related to national security. The buyer is a U.S. company (an ally nation).
- Shareholder approval. The scheme will require approval from 75% of votes cast. TASK’s co-founders, the Houden family, are supporting the transaction with their 18% stake. Houden brothers have the roles of CEO and the general manager of TSK. The buyout comes at a substantial 100% premium over TSK’s pre-announcement prices and is at the highest level since the IPO in late 2020 (at A$1.13/share). The takeover values TSK at around 5x ARR (or sales), which doesn’t look cheap given the company’s under-scaled business, breakevenish EBITDA, massive customer concentration (80% of sales stem from McDonald’s) and rather lackluster growth in all other areas except the MCD business. Given all this, I do not think shareholders will oppose to this deal.
- The election of stock consideration. The merger is contingent on at least 18% of merger consideration being in stock. This means that at least 36% of shareholders have to choose mixed consideration (as the stock portion cannot be more than half of each shareholder’s stake). AFR reported that the Houden family (owns 18%) has agreed to elect the 50% stock consideration. This already fills half of the required threshold. The mixed consideration currently offers a higher upside with cheap borrow available for hedging. The cash and mixed considerations would become equal if PAR share price declines to $35/share over the next few months. This could potentially make it a bit more difficult to satisfy the stock election condition. However, I don’t believe PAR would agree to break the merger over such a small nuance. In such case, the condition would most likely get waived. Aside from that, the recent large capital raise at A$38.65/share to major shareholders provides some confidence in the short-term price support.
- Termination fee. The termination fee is set at just A$1.3m. This amounts to a mere 0.4% of the total consideration compared to the 2%-4% typically seen in the US deals. While this might spark concerns about potential merger risks, it also could be a signal (and I think this is way more likely here) that both parties see a possibility of a competing bidder emerging. For instance, another recently announced deal in Australia between Louis Dreyfus and Namoi Cotton also had an extremely low termination fee of just A$1m (vs A$140m consideration). Two months after parties have signed a definitive agreement, a competing bidder for Namoi Cotton emerged, prompting the initial bidder to raise the price again. PAR/TSK’s merger announcement also emphasized a number of times that TSK’s management and the Houden family supports the deal only in “absence of a superior proposal”. The agreement includes “no-shop” and “no talk” restrictions and a matching right for PAR.
A bit more background on TASK Group
TASK Group is a combination of two businesses – Plexure and Task Retail. Plexure’s relationship with MCD started in 2016. Three years later, MCD has even invested in Plexure and acquired a 10% stake. This stake was diluted with later offerings and I no longer see MCD among the major shareholders of TSK.
Plexure acquired Task (which used to be privately run by Houden family) in August 2021. MCD supported the transaction and participated in the company’s capital raising (on pro-rata basis) at A$0.5/share. Task’s shareholders received 43% of the combined company. However, Task’s management took over the management and the company’s name was also eventually changed, so the transaction was more akin to a reverse merger.
Task Retail was acquired at around 10x sales and 50x EBITDA on TTM basis and around 7.6x sales, 34x EBITDA on 2019 (pre-COVID) figures. The acquisition was done around 2021 tech market bubble peaks. At the time, the multiple paid didn’t really stand out among other similar tech mergers (including PAR’s acquisition of Punchh):
At the time, Plexure itself traded at only 2x sales. However, following the merger, Plexure business was restructured, focusing on cost-cutting and deal terms renegotiation with MCD. The terms were amended and Plexure/MCD entered into a new 5 year contract in August 2022. As a result of the improved contract terms and restructuring, Plexure’s revenues have more than doubled. The division (as well as the whole TSK company) has finally turned profitable on EBITDA level. TASK division, however, is still unprofitable and did not grow much over the last reported period.
I might be reading this wrong but isn’t it likely the stock offer will be oversubscribed and as such you will get less than 50% of the consideration in stocks?
Not only is your upside potential less, you also can’t hedge perfectly
I might be reading this incorrectly but I think that there is a lower bound on stock offers but no upper bound.
Thanks for the interesting idea! Seems like it’s “up to 50%” in stock? https://announcements.asx.com.au/asxpdf/20240311/pdf/061bpzs6l0qsdz.pdf – to your point, it might be worth hedging a >50% allocation if you’re worried that PAR stock going down could frustrate the deal.
The 12% spread indicated in the write-up was calculated assuming that you receive only 50% of the merger consideration in stock and the rest in cash.
Correct me if I am wrong.
I didn’t find any mention of proration in the scheme booklet.
If I understand correctly:
(1) We can elect to receive at most 50% of the consideration in stock;
(2) For the deal to proceed, total scrip consideration must comprise >18% of the aggregate scheme consideration (but this condition can potentially be waived);
(3) If we elect to receive 50% in stock, we will receive exactly 50% if the deal goes ahead; there is no proration, and it’s safe to hedge based on this exact amount . (this is where I am not sure; I may have missed something in the booklet)
Snowball,
I have interpreted the terms as you have. The stock election is capped at 50%, but is not subject to proration. Therefore, you can hedge based upon a known amount.
In its latest investor letter Greenhaven Road talks about the importance of TASK acquisition for PAR’s business. I continue to think that the likelihood of PAR walking away from this deal is tiny as the merger would open a number of important growth paths.
https://static1.squarespace.com/static/5498841ce4b0311b8ddc012b/t/662d2a6b03d31820f6ae08cf/1714236011981/Greenhaven+Road+-+2024+Q1+fINAL-.pdf
Not mentioned in the write-up is that not all shareholders can make a stock election.
“Foreign Scheme Shareholder means a Scheme Participant whose address in
the Register as at the Record Date is a place outside Australia, New Zealand, the
United States of America or Poland”
“Each Target Shareholder (other than a Foreign Scheme Shareholder)
will be entitled to make an Election.”
Probably not a bit issue for most investors here but DYODD: make sure you understand how your broker holds your shares.
The Register is the register of TASK Shareholders maintained by TASK so if you hold your shares in street name then how could you or your address appear there?
Based on past experience: they use the domicile of your custodian. That’s why I said make sure you understand how your broker holds your shares. If you have a US brokerage account you should probably be fine (foreign shareholders are basically classified as non-US, non-Aussie). But if you have a European or Asian brokerage account you have to figure out how they hold your shares and whether you are eligible to make an election.
Do you know if the election is possible when you hold your account at Interactive broker?
—
Interactive Brokers operates under a custodian model for ASX shareholding. IBKR is not self-cleared and client’s holdings are held in the name of Interactive Brokers Australia in our custodian account with BNP for the benefit of our customers who are entitled to the securities. Hence, we do not provide individual registration of holdings and HIN or SRN is not available. That being said, you are still entitled to participate in any corporate actions the company offers.
IBKR does not dictate who can and cannot submit an election for any corporate action event. IBKR simply passes on your details including account title, registered address and election to the share registry for processing. It is up to the share registry and the issuing company to accept or reject client elections.
—
You tell me. I think if you’re a US citizen you should be good since it’s either US or Australia for you. For European clients I’m not sure.
Many thanks writser ! But I am a EU customer going through IB Ireland and I will not take the risk of not being able to elect…..
The scheme booklet has been released, and a shareholder meeting is scheduled for June 28. If approved, July 8 would be the last trading day for TSK’s shares on the ASX. Using the mixed consideration (50% of PAR stock at 0.015x plus 50% cash at A$0.81 per share), the remaining upside stands at around 10%.
https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02811397-2A1525579
PAR has finally sold its government business for US$102m, clearing up one of the main uncertainties of this merger. PAR will now be able to use the divestment proceeds to partially fund the cash consideration for TSK.
Approval from the New Zealand’s foreign investment regulators has been received. Green light from Australia’s FIRB is still pending, but it is not expected to pose any issues.
Shareholder meeting is scheduled for June 28. Currently, the spread is at 9%.
https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02816416-2A1528560
https://www.bamsec.com/filing/114036124029413?cik=708821
Hi all,
Did anyone else get a message that the tender was canceled from their broker. Interactive sent me the following message today:
REJECTION OF SUBMITTED VOLUNTARY CORPORATE ACTION INSTRUCTIONS
There was a change in terms and conditions for the following voluntary corporate action for which XXXXX submitted instructions.
TSK TASK GROUP HOLDINGS LTD Tender Issue Jun 17, 2024 21:00 EDT
This action is in response to either a termination of the voluntary corporate action offer or a significant change in terms.
I’ve reached out to IBKR, but don’t expect to hear back today due to the US holiday.
Hi Tom, I havent received the message but my tendered shares are back in my account as normal shares and I got a new cop action message. Apparently the option to tender a % of the shares at your choice is not available anymore. Only the cash or 50/50 consideration as choices now available.
From IB:
Cash Consideration (DEFAULT OPTION) – Under the Scheme, TASK shareholders will have the opportunity to elect to receive consideration of 100 PERCENT cash at a price of AUD 0.81 per TASK Share (CASH Consideration).
Mixed Consideration – Any client elections under MIX Consideration will receive their Scheme Consideration in the form of 50 percent new Securities and 50 percent Cash in respect to their TSK Shares (subject to any scale backs at the discretion of the Bidder).
re IB’s “(subject to any scale backs at the discretion of the Bidder)” :
I don’t see any mention of this possibility in the scheme booklet.
MA an snowball,
Thanks for your comments. IB sent me a new offer (with just the two choices). I’ve completed it and IB has confirmed my selection.
when is the deadline at IB?
As expected, FIRB approval has been granted. The spread currently stands at 7%. However, keep in mind that this is a cross-border merger with no overlapping trading hours between the US and Australia.
https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02821174-2A1531322
Do we have an ETA for this merger?
Many thanks
From today’s ASX announcement: “Subject to shareholder and court approval, Implementation of the Scheme is expected to remain unchanged and accordingly still occur on 19 July 2024.”
In the original merger announcement, it was stated that the deal is expected to close sometime in Q3 2024. I haven’t found updates on the timeline, so I assume the original expectation still stands. With the shareholder meeting due tomorrow, it seems likely that this might get wrapped up in the first part of Q3, but this is just speculation on my part.
https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02783043-2A1510882
I’m surprised the spread hasn’t closed more considering the timeline and recent annoucements. Does anyone else have thoughts on why that might be?
At the current stock orice only the mixed consideration makes sense. There is the possibility of scale back – ie PAR component of the proceed is scaled back and the cash component of $0.81 becomes >50% of the consideration.
There is very little information about this in the documents, but there is such a gap between the stock component and the cash consideration, that PAR might be thinking about what options they have.
The scheme documents make it clear that there is no possibility of scaleback. “The maximum number of New PAR Shares that would be issued by PAR (on the assumption that every applicable Scheme Participant has made a valid Mixed Consideration Election specifying an Election Percentage of 50% in respect of all of their Scheme Shares) is approximately 2,868,644.” That seems pretty clear to me. The spread has narrowed now, but I think the returns offered on this trade were attractive because some Australian/NZ shareholders did not want/could not hold the US stock and thus these shareholders were willing to sell TSK shares at a discount to mixed consideration because they were planning to take the cash option anyway. The fact that this was a cross-border transaction with a need to hedge also helped, as some market participants can’t/won’t short-sell. On reflection, I think this was a great setup thanks to some of these quirks. These sorts of deals seem to be a good place to fish for arb returns.
The meeting has been adjourned due to what looks like formalities. This adjournment allows TASK to obtain approval from the Supreme Court of New South Wales to provide supplementary materials to shareholders, including reminders about the Scheme Booklet, the advantages and disadvantages of the Scheme, and the directors’ interests. Shareholders will be notified of the rescheduled date and time later.
If I understand correctly, the deal is expected to close on the 19th of July, subject to shareholder and court approval.
“Subject to shareholder and court approval, implementation of the Scheme is expected to remain unchanged and accordingly still occur on 19 July 2024.”
Spread stands at 5% but keep in mind that this is a cross boarder merger with no overlap in trading hours.
https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02822160-2A1532046
As expected, shareholder approval was received yesterday, with an absolute majority voting in favor of the scheme. The only remaining hurdle is court approval on July 9, after which the transaction will close on July 19.
https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02824746-2A1533856
Court approval has been granted, and the scheme is now legally effective. TSK’s shares should now be suspended, and the scheme will be implemented on July 19.
https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02826612-2A1535037
https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02826805-2A1535175
Looks like the mixed consideration option was undersubscribed. Has anyone received their payment yet?
“PAR Technology finalized the acquisition for cash consideration of approximately U.S. $131.5
million, and the issuance at closing of 2,163,393 shares of PAR Technology common stock.”
“The maximum number of New PAR Shares that would be issued by PAR (on the assumption that every applicable Scheme Participant has made a valid Mixed Consideration Election specifying an Election Percentage of 50% in respect of all of their Scheme Shares) is approximately 2,868,644.”
No PAR shares or money in my IB account yet.
Same here
Cash hit my account today. No shares yet
I also received my cash at IBKR. I also have a position in TSK.MIX9 which as a position size lists 2x the number of shares of PAR that I expected to receive and records a last price of $83.35. Anyone else have a similar position?
If I look at the activity report in the Corporate Actions section, IBKR notes that I received 15 shares for every 1000 shares of TSK. I believe we were only supposed to receive half that amount.
Hey Tom, same situation here. Do you have any information if/until when they will fix it?
MA
On Friday, I spoke with a rep twice. They really couldn’t tell me anything other then they were in the midst of processing the exchanged. They could not explain where the price of TSK.MIX9 had come from, how they came up with the number of shares, or whether the full value of TSK.MIX9 was included in my account valuation. I believe the full value is included in my account valued and the account value is overstated due to the price and number of shares being used, but I’m not really sure what other adjustments there might be. Normally, this kind of corporate action goes smoothly at IBKR, but this has been crazy. At this point, I’m just going to wait.
Any thoughts?
Same feeling here. Account value is definitely wrong and my hedged PAR position is sitting there waiting to be canceled. I think there is not much we can do except for waiting.
The 83.35 price seems to be the AUD value of the USD PAR share price. No idea where the amount of shares are c coming from, clearly wrong. And yes, this error overinflates the value of your account.
This is taking forever. Any news from IB corporate action guys?
No news, almost one month since closing…
Update from IBKR 14-Aug: Please be advised that we have received the DRS statement today and are awaiting the deposit into IB. Once deposited, we will be able to process the allocation.
PAR shares received in my account!
Just wait for a bit. Cross-border mergers often take a bit longer to complete and the only thing that is wrong is that IB apparently thinks that you get double the amount of shares that you should actually receive (which would be awesome, no?).
Immediately bothering support about this is counterproductive for everybody involved.
Considering that PAR Tech has delivered the cash and the shares on Jul 19, I don’t get why does it takes so long to IB to receive them. Two weeks for a cross-border merger?
Is somebody working with other broker? Is it in the same situation?
“On the Closing Date, PAR Technology paid holders of TASK shares as of the Record Date approximately US$131.5 million in cash, the TASK Cash Consideration, and issued 2,163,393 shares of PAR Technology common stock, the TASK Share Consideration, “
They might be sending physical share certificates from the US to AU… not kidding!
I wrote Task Group investor relations, their answer: “Holders will receive a statement from PAR’s US registry listing the number of PAR shares they have. Please allow up to 15 days for this statement to arrive.”
I contacted IBKR corporate actions and requested they review the terms of the transaction. I told them I believed they had listed twice the number of shares that investors are to receive. This morning the TSK.MIX9 position size is corrected.
Why the f*** would you ever do that?
Because I wanted my account value to represent the correct value and there was absolutely no doubt in my mind that IBKR would discover its error when it received the actual equity. Having the wrong equity value in my account creates other issues for me which I have no interest in sharing with you. Even if for some reason they sent you the wrong number of shares, I’m sure you realize that you are not entitled to keep them and once they discovered their error they would be gone from you account.
I hope you didn’t do it because you were afraid it would mess up your y/e tax filings as it is only August.
Occasionally somebody down the chain of custody does make an error. IB holds Australian shares in an omnibus account, sometimes proration is different from what you’d expect. It’s a small mistake, but in the long run alerting your broker whenever there is even the remotest chance that they might make an “error in your favor” is, well, counterproductive. Not to mention that the IB helpdesk is understaffed already.