Sembcorp Marine acquisition of Keppel Offshore and Marine (O&M) was great news for Keppel Corp shareholders. I was please seeing Keppel Corp go asset light and cutting off their O&M business. But this whole scheme of things was so complicated! I had a really hard time trying to account for this transaction.
The proper way to account properly on paper was to do the following:
a) Sell Keppel Corp at $7.34, which is its closing price on 22 Feb 2023;
b) For every 1 unit Keppel Corp owned on 22 Feb, buy 19.085033835 units of Sembcorp Marine at $0.134, its closing price on 22 Feb 2023; and
c) Buy back the exact number of units of Keppel Corp you sold at $4.7826. ($4.7826 because it is the adjusted-for-distribution price; $7.34-(19.085033835*$0.134))
But because I want to track when my different tranches of Keppel Corp transactions will be freehold, I had to use a different method. Since I sold off my Sembcorp Marine stocks on the very first day...
