Acquisition by Unibail-Rodamco of Westfield Corporation and OneMarket demerger (ASX: WFD)

Note

BGL do not provide accounting or taxation advice. The following is designed to act as a guide for Simple Fund 360 users. It is not designed to be accounting or tax advice and should not be taken as a strict guideline. Other methods that are more suitable may be used instead of these steps. 

Overview

Westfield transferred all its shares in OneMarket to its shareholders (i.e. to the Westfield Group stapled security holders). This happened on 7 June 2018, just before the exchange of Westfield Group stapled securities for Unibail-Rodamco SE stapled securities and cash. On 7 June 2018, all of the Westfield Group stapled securities were exchanged for Unibail-Rodamco SE stapled securities and cash.

Westfield was delisted from the ASX at close 08/06/2018.

ATO Westfield Group - 2018 Calculator

Former Westfield Group stapled security holders can use The Westfield Group - 2018 calculator to work out their tax outcomes from the takeover by Unibail-Rodamco SE on 7 June 2018.

Click Here to view instructions

Summary - Unibail Acquisition

• The cash consideration (being AUD$3.51536 (US$2.67) per Westfield stapled security) under the Unibail-Rodamco acquisition scheme
• The scrip consideration (being 0.01844 Unibail-Rodamco stapled shares per Westfield stapled security)
• The issue of Unibail-Rodamco CDIs to eligible Westfield security holders.

Key Dates

Event	Date
Effective Date	30th May 2018
Record Date	1st June 2018
Implementation Date	7th June 2018

Summary - OneMarket Demerger

The demerger scheme consideration (being one OneMarket share for every 20 Westfield Corporation Limited shares) is transferred to each Westfield security holder who was registered as the holder of a Westfield Corporation Limited share at 7pm (Sydney time) on 1 June 2018 (other than ineligible security holders or security holders who elected to sell their OneMarket shares).

Share Sale Facility:

Shareholders who hold fewer than 10,000 Westfield shares as at the Demerger Record Date, and do not wish to receive OneMarket shares can elect to participate in the Sale Facility. When electing to participate, the OneMarket shares are transferred to a sale agent to proceed with the sale facility and forward the cash proceeds.

• 1 OneMarket share (OMN.ASX) for every 20 Westfield (WFD.ASX) share held. Rounded up to the nearest whole number.
• Consideration from the demerger will be paid via a Distribution. Where the Distribution exceeds A$150,000,000, then this excess will be paid as a Capital Reduction.

The Distribution will not be paid in cash. Rather, the proceeds will be applied to the purchase of the OneMarket share allocation.

Key Dates:

Event	Date
Effective Date	30th May 2018
Record Date	1st June 2018
Implementation Date	7th June 2018
Dispatch of SSF Proceeds	31st July 2018

How can I see which funds are affected by the Demerger?

1. Navigate to Analytical Insights and then select the Transaction tab
   
2. Search for WFD.AX and select Investment
   

Instructions for Simple Fund 360

EXAMPLE

• The fund holds 5,000 Units in Westfield which has a cost base of $37,500.00 including brokerage
• Rollover Relief is Not Applied 

STEP ONE - Add New Securities to Chart of Accounts

Add URW.AX (Unibail-Rodamco-Westfield) and OMN.AX (OneMarket) to the fund's chart of accounts 

STEP TWO - Receipt of OneMarket (OMN) Shares

For every 20 Westfield Group stapled securities you held, you received 1 OneMarket share ( note for fractions this is rounded up to the nearest whole number). The OneMarket shares were received as a dividend on the WCL shares – so that for each WCL share there was a dividend of $0.0677

Cr 2018/31 states that the amount of the distribution is a dividend as defined in subsection 6(1) of the ITAA 1936.

1. The dividend amount can be confirmed by Westfield Annual tax statement
2. In the example above 5000 / 20 = 250 units
3. In the example above 5000 x $0.0677 = $338.50

Simple Fund 360 Instructions

1. Record a Distribution/Dividend on the 07th June 2018 for the amount received
2. Record a purchase in OMN for the units received and dividend amount.

STEP THREE - DEMERGER (No-Rollover Relief)

1. Disposal of Units in Westfield
   1. Use the ATO 2018 Westfield Calculator to calculate your capital Gain or Loss.
   2. Ensure the Reduced Cost Base in the calculator matches that of Simple Fund 360.
   3. In the example above the reduced cost base for the WFD units is $35,609.66. The CGT Gain calculated by the ATO Calculator is $9,011.08. Therefore in Simple Fund 360 the consideration which the WFD shares will need to be sold for is 35609.66 + 9011.08 = $44,620.74
2. Cash Received
   1. A Cash amount will be received in the bank for the demerger ( or issued by cheque if Bank details are not on file with the Registry).
   2. This will be equal to $3.5153 per unit held in Westfield. 
   3. In the example above, the cash amount received was $17,576.50 ($3.5153 x 5000 units).
   4. Any additional cash proceed paid from the fractional entitlement of URW resulting from the rounding, would need to be added to the sale consideration of WFD.
3. Units in Unibail-Rodamco
   1. Confirm with the Registry or broker statement the new units in Unibail-Rodamco. If you need to estimate you can use the following
   2. When Unibail-Rodamco completed the acquisition, they allocated 0.01844 stapled shares for every 1 WFD held (rounded down
   3. This amount is then converted to the final URW.ASX CDI instrument of 0.3688 (being 0.01844 x 20 CDI). For the example above this is equal to 5,000 x 0.01844 = 92 (rounded down). 92 x 20 = 1840
4. Cost Base for Unibail-Rodamco
   1. This will be displayed in the calculator
5. Remaining amount between the Cost base of Unibail, Cash and Disposal of Westfield 
   1. The tax ruling notes that there may be fluctuations in the Unibail-Rodamco share price and exchange rates. This may cause a remaining amount outstanding between the Cost base of Unibail, Cash and Disposal of Westfield. This can be recorded to a Non-Deductible Expense account
   2. In the example above this is equal to $58.98.

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Instructions for Simple Fund 360

1. Edit the Transaction received via the fund's bank feed or if the fund does not have a data feed create a new Bank Transaction
2. Process disposal for the consideration calculated 
   2a. Any additional cash proceed paid from the fractional entitlement of URW resulting from the rounding should form part of the sale consideration of WFD.
3. Enter a purchase for the number of units issues in URW and for the cost base calculated.

STEP THREE - DEMERGER (Rollover-Relief)

Use the ATO 2018 Westfield Calculator to calculate your Unibail-Rodamco CDISs with CGT-Rollover

Required Information:

Reduced Cost-Base (1)	35,609.66
Total Cost Base of Unibail with Rollover (2)	5146.08
Total CGT Gain/Loss (3)	4787.97
Cash Received (4)	17,576.50
Units in Unbail without Rollover Relief (5)	1,202
Cost base of the units in Unbail without Rollover Relief (6)	17628.41

1. Reduced Cost Base

Ensure the reduced cost base in the calculator matches the cost base of the investment in Simple Fund 360.

2. Total Cost Base of Unibail with Rollover

The ATO accepts that the portion of the Unibail-Rodamco shares that were received in respect of your WCL shares was 34.7% and the portion that was not received in respect of your WCL shares was 65.3%. 

Using the ATO 2018 Westfield Calculator, the cost base rolled over is equal to $5146.08.

3. Total CGT Gain/Loss

Use the ATO 2018 Westfield Calculator to calculate your capital Gain or Loss. 

The CGT Gain calculated by the ATO Calculator is $4,787.97.

4. Cash Received

A cash amount will be received in the bank for the demerger ( or issued by cheque if Bank details are not on file with the Registry).

This will be equal to $3.5153 per unit held in Westfield.

In the example above, the cash amount received was $17,576.50 ($3.5153 x 5000 units).

5. Units in Unbail without Rollover Relief

Confirm with the Registry or broker statement the new units in Unibail-Rodamco. If you need to estimate you can use the following:

When Unibail-Rodamco completed the acquisition, they allocated 0.01844 stapled shares for every 1 WFD held. This amount is then converted to the final URW.ASX CDI instrument of 0.3688 (being 0.01844 x 20 CDI).

Alternatively, use the ATO 2018 Westfield Calculator to determine this. In this example, the number of units in Unibail without Rollover Relief is 1,202

6. Cost Base for Unibail-Rodamco (WFDT and WAT - no rollover relief)

This will be based on the amount in the ATO 2018 Westfield Calculator.

In this example above this is equal to $17628.41.

Instructions for Simple Fund 360

1. Process the acquisition of the Unibail units with Rollover Relief using the demerger function.

2. Edit the Transaction received via the fund's bank feed or if the fund does not have a data feed create a new Bank Transaction to process a disposal for the consideration calculated and record a purchase for the number of units issues in URW and for the cost base calculated.

1. Disposal of Units in Westfield
   1. In the example above the reduced cost base for the WFD units prior to the demerger is $35,609.66. Therefore in Simple Fund 360 the consideration which the WFD shares will need to be sold for is: Reduced Cost Base + Total Capital Gains - Total Cost Base of Unibail with Rollover = 35,609.66 + 4,787.97 - 5146.08 = $35,251.55
2. The remaining amount between the Cost base of Unibail, Cash and Disposal of Westfield 
   1. The tax ruling notes that there may be fluctuations in the Unibail-Rodamco share price and exchange rates. This may cause a remaining amount outstanding between the Cost base of Unibail, Cash and Disposal of Westfield. This can be recorded to a Non-Deductible Expense account
   2. In the example above this is equal to $46.64

Instructions for Simple Fund 360

1. 
2. Edit the Transaction received via the fund's bank feed or if the fund does not have a data feed create a new Bank Transaction
3. Process disposal for the consideration calculated 
4. Enter a purchase for the number of units issues in URW and for the cost base calculated.

References

1. ATO CR 2018/31 - Income tax: sale of Westfield Group stapled securities to Unibail-Rodamco SE - capital gains consequences
2. Westfield Scheme booklet - Unibail-Rodamco Acquisition
3. Westfield Scheme booklet - Onemarket demerger
4. Westfield - Exchange Rate Confirmation
5. OMN - Cost Base Information