# Pfizer to spinoff Zoetis (PFE) Anybody?



## donald (Apr 18, 2011)

I own pfe and rbc has sent me a letter informing me i have a choice to spin my shares into zoetis(livestock drug line i believe)I'm being extremely vague here(the papers are @ my office)They are offering for every $100 of pfe to =$107 of the new offering of zoetis.
It appears to me zts has a very weak dividend(i bought pfe as a income stock)
Anyways i'm just wondering is this usually a advantages offering?Never have had this before.
I have till the 18th to decide.(i can convert any part % wise)

Anybody else own pfe and is faced with this decision?
The ipo was back roughly 4 mths ago and for some reason i am just being notified now of this.


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## bettyboop (Dec 13, 2011)

I am faced with the same decision. I called TDW and asked if there were any fees being charged for the trade and they didn't have that information, I asked what the price of ZTS was going to be and they didn't have that information, I asked that being a "trade of shares" not a spin-off if I would need to realize capital gains on the PFE shares I exchanged and guess what? they didn't have that information.

When I last checked there were 2 posts on the Yahoo board that mentioned a $25. fee and another one said there was a $30. fee depending on the brokerage house one deals with, but that's a US site. I'm thinking of exchanging half my PFE if there are no fees.


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## donald (Apr 18, 2011)

Betty,when were you notified?Thing that is bothering me is i just got the mail and i have 4 days to decide.
Again being real vague here,i believe zts is 32 and change(i want to know what the div is,is this a growth stock ect ect)I'm going to have to look this over during the wknd-under the gun shessh!
Could be a good offer----getting a higher amt put forward for the exchange.Little out of my league here
I love pfe for the income qualities though.


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## humble_pie (Jun 7, 2009)

donald now is the time for u to contact your ace spiffy top-of-the-line fantabulous number one royal bank discount broker & get them to hold your hand with all the answers to your questions ... 

including whether or not accepting new shares will mean deemed disposition of the relevant pfizer shares in the eyes of canadian tax authorities ...

that's what an ace number one broker like roybank does, after all.

(hint) (for other shareholders holding pfizer at ordinary plain vanilla discount brokers) all of the details will be found in documents either on the pfizer website or else filed on EDGAR. You'd want to look for a document with a title something like Offering Memorandum or Plan of Arrangement.

it's possible that pfizer even has a specific section dealing with tax consequences of new share deal for canadian & other foreign shareholders. Responsible US companies - as well as responsible canadian companies - often do draft up text with these details.

(hint for all) the pfizer deal is obviously very far along in that the canadian brokers' Reorg departments have already mailed out their reorg notices. Typically, Reorg is the last to know. Typically, Reorg notices are sent out with only a few days to spare. Sometimes they are even mailed after the deadline for accepting a new shareholder arrangement has passed!

details of the pfizer arrangement must have been pending in the news for months. Pfizer shareholders may have even voted to accept the deal. Shareholders are supposed to monitor & track their companies' news heh.


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## Sampson (Apr 3, 2009)

I'm on the fence.

The animal health industry is far more profitable than the human health industry. Vaccines are the name of the game and many get approval with much less scrutiny than drugs for humans. And their efficacy is often much lower. Emerging diseases are always much more of a problem in the animal health industry also due to the nature of agricultural practices and minimal effort to maintain strict hygiene, use of single breeds that can be susceptible to virulent pathogens etc.

I may simply decide to buy Zoetis independently at a different date since I want to hold on to my Pfizer shares. Growth in the animal health industry should outpace the other side as patents start to end and the pipeline is not the most promising for any of the big pharma. Problem is I have a decent Novartis holding and get lots of animal health industry exposure there too.


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## Toronto.gal (Jan 8, 2010)

donald said:


> 1. It appears to me zts has a very weak dividend(i bought pfe as a income stock)...I have till the 18th to decide.
> 2. The ipo was back roughly 4 mths ago and for some reason i am just being notified now of this.


*1.* I think you're too focused on the dividends alone & over-stressing for no reason. Even if you were to miss the deadline & you wanted ZTS, you could always get it at a later date. 

I would suggest you start by asking yourself whether ZTS interests you at all. How much do you know about that sector/what do you think of the valuation/would you keep it short/long-term, etc. After asking yourself the right questions, you'll see that the answer is not as difficult as you make it sound.

http://www.zoetis.com/about/at-a-glance

*2.* Eh?! Do you pay your broker extra to keep you informed of all news relating to your investments? 

ZTS opened back in Feb. @ $31+ & remained there pretty much, hence the IPO of $26, saw an initial increase of $5+ or around 20%, and currently sitting @ -$4.51 from the year's high of $35+.
Could this stock be bought lower than what you would now pay for it with the discount offered/lower than its IPO? Sure, anything is possible. 

Regarding taxation in general btw, it depends on the many factors listed in link below. Also listed below, are instructions on tax-deferral for eligible spinoffs.
http://www.cra-arc.gc.ca/tx/bsnss/tpcs/cdnshrhldrs-eng.html#acb

I see that the 2013 list was last modified in April.
http://www.cra-arc.gc.ca/tx/bsnss/tpcs/spnffs-eng.html

*Edit:* brokers sometimes give incorrect information, so double-check what they tell you.


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## humble_pie (Jun 7, 2009)

sampson are there any big pharmas that do have truly promising pipelines? i have merck, others are happy with teva. 

oh i forgot i have valeant & imuc. Options in these as well. But these companies don't belong to big pharma.


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## Charlie (May 20, 2011)

I own PFE in my RRSP and this is the first I've heard of this....BMO investorline FWIW.

I think I'll let sleeping dogs lie. (and PFE has been a bit of a dog for me ).


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## fraser (May 15, 2010)

We have PFE stock. We have not rec'd any notification. Will have to check.


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## AltaRed (Jun 8, 2009)

ISTM that one has to decide whether they want to be in a different line of business than the primary business of PFE for which one presumably bought the stock to begin with. The decision should be that simple. I am not tendering any shares. 

I received the materials from iTrade about a week ago. The mailing was dated May 23rd. Perhaps blame Canada Post for tardy delivery service.


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## Sampson (Apr 3, 2009)

humble_pie said:


> sampson are there any big pharmas that do have truly promising pipelines? i have merck, others are happy with teva.
> 
> oh i forgot i have valeant & imuc. Options in these as well. But these companies don't belong to big pharma.


None (that I know of).

Merck might be the best of the bunch, only because they were pounded quite badly. I really like my Novartis call. They have one of the largest animal health divisions (see the trend here ), have an excellent generics department (call this a back up plan to maintain revenues - TEVA has a very strong generics business also), and have branched into more 'cosmetic' or commercial ventures with the Alcon acquisition.

It is fully valued by my calculations, but all of the others really have major drugs coming off patent soon. I like the more 'complex' and diversified companies, even if they are the biggest players - something akin to Roche. Call me a fan of Swiss pharma.

This is ridiculously tough field and I think the big guys can only continue via acquisitions - antibodies are already, and going forward, the new arena and there are so many tiny companies that can do it well and are doing more targeted R&D (versus the mass compound screening the big guys do). The next big thing is going to come from a startup, and who knows which big pharma will access quickly.


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## humble_pie (Jun 7, 2009)

donald thank you for the gracious message! it's a perfect rorschach picture of the donald's mind! Let's hope the moderators leave it here - filth, obscenities & all.

donald u were insistent that you broker is canada's numero uno best, so now is the time to call upon their assistance. No doubt they will leap at the opportunity to help a client like yourself 

meanwhile, normal pfizer shareholders can find the governing prospectus for the current Zoetis share issue here (scroll far down, click on Prospectus):

http://www.zoetisexchange.com/

the tax treatment discussed is for US taxpayers only. It's dependent upon an IRS private ruling. This might leave open the question of tax consequences for canadian shareholders.


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## HaroldCrump (Jun 10, 2009)

OMG, that is the most hideous and obnoxious post I have seen on CMF in nearly 4 years.
The subject matter of PFE spin off is nothing that ought to elicit such vile vituperation.
Is there something else going on here, donald?

I have to agree that as a shareholder, you ought to be aware of such key decisions that _your_ company is making.
Ideally, you should be reading the quarterly and annual reports.
But, at the very least, you should be keeping abreast of company news through Google, Yahoo or similar finance site.
Therefore, there was nothing unfair in that suggestion from humble_pie.

If your rage has subsided, I suggest you edit your own post and delete all the insults.


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## Xoron (Jun 22, 2010)

humble_pie said:


> it's possible that pfizer even has a specific section dealing with tax consequences of new share deal for canadian & other foreign shareholders. Responsible US companies - as well as responsible canadian companies - often do draft up text with these details.


Spinoffs are generally structured so that there are no tax consequences (for the US investors). I doubt foreign investors are given any thought, and you should seek advice from your brokerage as HP says.




humble_pie said:


> details of the pfizer arrangement must have been pending in the news for months. Pfizer shareholders may have even voted to accept the deal. Shareholders are supposed to monitor & track their companies' news heh.


In the spinoffs I've been part of (as an investor), there usually isn't any shareholder vote required. But this is certainly on a case by case basis determined by the Board of the parent company.

Generally, spinoffs are good thing for investors. I'd be inclined to participate and hold the shares.


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## humble_pie (Jun 7, 2009)

Xoron said:


> Spinoffs are generally structured so that there are no tax consequences (for the US investors). I doubt foreign investors are given any thought, and you should seek advice from your brokerage as HP says



so sorry! but i don't think a broker can help. Especially not a discount broker, they will refuse outright i suspect. Frankly i believe even a full service broker would abstain from comment on this one!

what might be difficult is that zoetis doesn't appear to be a normal spinoff. I posted the link to the prospectus for the share offering that's going on right now in a message just above. The document deals with US taxpayer shareholders only.

everything depends on how canadian tax authorities would view the structuring. This appears to be a situation where folks here might band together to share whatever resources each one can muster.

i myself would start with pfizer's own investor relations. They can't pronounce for canadian taxpaying shareholders, but if one were lucky & stumbled upon a good IR, he or she might discuss details of the US deal that could shed some light on how canadian authorities will view. Especially important to ask the pfizer IR, i believe, is what kind of similar deals have taken place during the past several years. Because for similar recent US deals, canada probably already has some rulings.

(aside to Eclectic) you are our resident intricate tax master! might you be willing to have a go at this? would probably be much appreciated ...


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