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Merck's (MRK) Spinoff of Medco (MHS)

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Posted by Arthur H Neill, Jr. on August 21, 2003 at 08:34:51:

"Merck & Company plans to spin off Medco Health Solutions, its pharmacy-benefits manager unit, on Aug. 19. Trading in Medco will begin Friday on the New York Stock Exchange under the symbol MHS. Merck investors will get a special dividend of 0.1206 shares of Medco common stock for each share held as of Aug. 12, the company, based in Whitehouse, N.J., said yesterday. Merck, which wants to focus on the faster-growing pharmaceuticals business, announced the plan in April after calling off an initial public offering for Medco for lack of investor interest."

I am trying to enter this spinoff accurately in the portfolio. I tried to follow your instructions "How To Handle Spinoffs". Unfortunately, I was not informed of the cost basis allocation which is an essential part of your instructions. With the aforementioned info. is there sufficient detail to enter the Spinoff and get an accurate cost basis? I owned and still own 365.005 shares of MRK and as of 8/12/03 I own 46 shares of MHS. I could not find the Cost Basis Allocation Percentage anywhere.

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