Company mergers can be handled within Portfolio Manager in a couple different ways. This depends on the tax ruling for that merger as each differs slightly. For this reason a generic approach has been taken, allowing you to change any steps along the way if required. You will most likely need to speak to your accountant to determine the correct method of accounting for the merger.
If CGT scrip for scrip rollover relief is not available then you essentially sell the stock as normal on the date and amount specified by the merger and then add a new stock in for the new company. If it is available then follow the company merger company merger steps provided in the help file.