Albertsons and Safeway announced today that they have completed the merger transaction. This wasn’t exactly a surprise after they received clearance from the FTC earlier this week. What is very interesting is that the press release contains valuations for both CVRs since that is required for tax reporting purposes. An estimated value of $1/share for Casa Ley isn’t bad:
Both contingent value rights will be non-transferable and non-tradable. For tax reporting purposes, Safeway intends to report that the fair market values of the contingent value rights at the time of the merger for PDC and Casa Ley are $0.0488 and $1.0149, respectively, per share, based on third party valuations.
Also nice is that the timings of the payments for PDC have been moved forward a little bit while the total amount has been increased slightly. It’s just a small difference, but probably enough to raise the IRR of the merger arb with a few percentage points.
With respect to PDC, both the initial cash distribution ($2.412 per share) and the total estimated asset value including the CVR ($2.461 per share) have increased slightly over the estimated values set forth in Safeway’s December 23, 2014 press release announcing the sale of PDC. Those earlier estimates were $2.38 per share and $2.45 per share, respectively.