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Why Berry Petroleum's Shares Jumped Today

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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 Berry Petroleum (UNKNOWN: BRY.DL2  ) jumped as much as 11% today after LINN Energy (NASDAQOTH: LINEQ  ) and affiliate LinnCo (UNKNOWN: LNCO.DL  ) increased their offer for the company.

So what: A buyout agreement between Berry Petroleum and LINN Energy could have been broken after last week but the companies were still working on terms that would keep both companies from backing out on the deal. Now, Berry Petroleum is now being offered 1.68 shares of LinnCo for each share in a buyout instead of the original 1.25 shares, an increase of about $600 million.

Now what: All three stocks actually moved higher today but the biggest winner would clearly be Berry Petroleum. There's also still upside for investors willing to bet on a deal going through. If the merger is completed at the current price, Berry shareholders would get $56.04 per share in LinnCo, a $4.32 upside from today. That's a risky bet considering the tribulation this deal has been through in the last month alone.

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Linn Energy's offer is trying to help the company prepare for the future of energy, something you should be doing too. The Motley Fool is offering a comprehensive look at three energy companies set to soar as the industry transitions from domestic coal and imported oil to domestic oil and natural gas. To find out which three companies are spreading their wings, check out the special free report, "3 Stocks for the American Energy Bonanza." Don't miss out on this timely opportunity; click here to access your report -- it's absolutely free. 

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Related Tickers

12/31/1969 7:00 PM
BRY.DL2 $0.00 Down +0.00 +0.00%
Berry Petroleum Co… CAPS Rating: ***
LINEQ $0.05 Up +0.00 +6.92%
Linn Energy, LLC CAPS Rating: **
LNCO.DL $0.05 Down +0.00 -3.88%
Linn Co, LLC CAPS Rating: ***