Why Linn Energy and Linn Co Popped

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Linn Energy (NASDAQ: LINE  ) and Linn Co, LLC (NASDAQ: LNCO  ) jumped more than 10% as the company cleared a hurdle for its merger with Berry Petroleum (UNKNOWN: BRY.DL  ) .

So what: Linn announced that the SEC said it has "no further comments" on the company's filed S-4, and Linn announced a November 6 conference call. Of course, this comes a day after the merger deadline passed, but as of right now, it's still on. 

Now what: The question is whether or not Berry's shareholders still see a merger as a good deal, which is extremely questionable at this point. The 1.25 shares of Linn Co they would get are worth $41.50 right now, well below Berry's stock price of $48.80. This may clear a hurdle, but it also comes at a time that Berry has a way out of the merger. 

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Comments from our Foolish Readers

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  • Report this Comment On November 03, 2013, at 8:41 PM, prginww wrote:

    For weeks The Fool has gone back and forth pumping this stock upand down. I'm sorta sick that they don't have an opinion one way or the other.

    I feel that Berry Shareholders will take a fair offer and LINE wil up the price. Berry Stock has done okay this year. However, they will get a very nice 10-11% dividend for starters and a Share hike of a good 20% when it hits 38 and beyond. Berry won't see that alone. The Permian Basin deal is just more crazy icing on this cake.

    And the best part... For years on out, this stock will guarantee all stock holders an excellent night's sleep as the wells churn all night long for years and years to come. They will all be Berry Happy.

    This is a killer deal for everyone esp those who hung in through LINE's ups and downs while The Fool pumped this stock up, down and sideways...

  • Report this Comment On November 04, 2013, at 9:34 AM, DrGoldin wrote:

    Have to agree with Sarnicar.

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