More RE/MAX holders asked for cash than there was cash, so the ones who asked are getting $4.33 a share and stock for the rest

At 4:25 p.m. Eastern on Monday, RE/MAX Holdings ceased to exist as a separate company.

Two mergers ran back to back. The first put the company under Real REMAX Group, a holding company that until recently was named Rome Wildlife, Inc. The second merged it out of existence into a limited liability company, which survived.

The agreement behind all of it is dated 26 April.

The election that did not clear

Shareholders had a choice, and the filing shows how they took it.

Holders of about 18,488,134 shares asked for cash. Holders of about 11,697,333 asked for stock, and holders of about 3,699,238 asked for nothing and were treated as having chosen stock. The three buckets sum to 33,884,705 shares, so about 55 percent of them went for the money.

There was about $80m of it. "Because the cash election was oversubscribed," the filing says, "the proration procedures described in the Merger Agreement were applied. IMAGE, ONE REJECTION AND IT WAS THE ARCHIVE CLASSIC. The automated pick was birds-eye-view-of-junction-in-town-16562853, an overhead aerial that is unmistakably not the United States: red laterite dirt roads and lots, palm trees, corrugated and flat concrete roofs and informal construction, reading as West Africa, on a story about the American residential brokerage market. That is the Brazilian forecourt failure verbatim and it was rejected on opening. The replacement is garage-buildings-in-suburban-neighborhood-21853691 by Ian Ramirez, chosen over two Curtis Adams townhouse rows because this archive already carries Curtis Adams townhouse photographs on costar-completes-zonda and the contributor and material family adjacency both applied. Examined at published size and then at ten times magnification on the one parked car at the right edge: the number plate resolves to an unreadable white smear and the badge to a smear, both incidental to a residential street."

The result is that nobody who elected cash is getting only cash. Each of those shares receives approximately $4.33 in cash plus approximately 0.3535 shares of the new company. Shares that elected stock, and shares that elected nothing, receive 0.5150 shares and no cash at all.

Multiply the 18,488,134 cash electing shares by $4.33 and the answer is $80,053,620, which is the approximately $80m the filing reports. The two figures check against each other.

Two share counts, and what they do not tell you

About 14,464,497 shares of Real REMAX Group are going to former RE/MAX holders. About 22,098,985 are going to former shareholders of Real.

Resist the division. Those two numbers do not add up to the new company's share count, because the same filing converts vested restricted and performance units into further shares at the stock exchange ratio, converts the unvested ones into units of the new company, and quantifies none of it. The filing states no ownership percentage, and neither does this.

The share figures do reconcile internally, roughly. Apply 0.5150 to the 15,396,571 shares that took stock and 0.3535 to the 18,488,134 that took cash, and the total comes to 14,464,789, which is 292 shares above the number the filing gives. Every ratio in the document is described as approximate, which is where the gap lives.

What closed with it

The credit agreement went first. All amounts outstanding under the July 2021 facility with JPMorgan Chase as administrative agent were repaid in full on the closing date, the commitments were terminated, and the guarantees and liens were released.

The tax receivable agreement with RIHI, Inc., signed on 7 October 2013 when the company came to market, terminated at the effective time of the first RIHI merger.

Every director resigned. The filing attaches the standard language: in connection with the mergers, not the result of any disagreement over operations, policies or practices. Eight officers resigned with them, named in the document as Erik Carlson, Karri Callahan, Susan Winders, Tom Flanagan, Victor Lombardo, Travis Saxton, Robert Fuchs and Christopher Lim. It gives no titles.

The listing

RE/MAX asked the New York Stock Exchange on Monday to file a Form 25 removing the stock from listing and deregistering it under Section 12(b).

Trading is expected to stop before the opening bell on Tuesday. Once the Form 25 takes effect, the company intends to file a Form 15, which suspends its reporting obligations under Sections 13 and 15(d) and ends the flow of filings this item was written from.