This week saw Unilever divest its ice cream business into a separate company (now with its own ticker and listed as Magnum Ice Cream Company). But I don't understand how the mechanics of it is supposed to work on an individual level.
For every 5 Unilever shares held, 1 Magnum share was issued to Unilever shareholders. To preserve comparability of Unilever shares before and after the divestment, there was a share consolidation on that side too. In theory, these two events should have roughly the same value (i.e. the price of the Magnum shares acquired should be equal, more or less, to the consolidated Unilever shares). In practice however:
This demerger should have been a zero-sum game in theory but I'm not sure how to record that for my own records - £47 x 11 shares lost in return for £11 x 19 gained?
For every 5 Unilever shares held, 1 Magnum share was issued to Unilever shareholders. To preserve comparability of Unilever shares before and after the divestment, there was a share consolidation on that side too. In theory, these two events should have roughly the same value (i.e. the price of the Magnum shares acquired should be equal, more or less, to the consolidated Unilever shares). In practice however:
| Pre-event | |||
| Share | No. of shares | Share price | Shareholding |
| Unilever | 98 | £47 | £4,606 |
| Post-event | |||
| Share | No. of shares | Share price | Shareholding |
| Unilever | 87 | £47 | £4,089 |
| MICC | 19 | £11 | £209 |
| Total | £4,298 |
This demerger should have been a zero-sum game in theory but I'm not sure how to record that for my own records - £47 x 11 shares lost in return for £11 x 19 gained?
