Did Linn Energy LLC (NASDAQ:LINE) Pay More For Berry Petroleum Company (NYSE:BRY)?
On November 4, 2013 Linn Energy LLC (NASDAQ:LINE), LinnCo LLC (NASDAQ:LNCO) and Berry Petroleum Company (NYSE:BRY) announced unanimous approval of the amended merger agreement by the Board of Directors of all three respective companies. As per the amendment to the original merger agreement the end date has been extended from October 31, 2013 to January 31, 2014.
As per the amended agreement, the shareholders of Berry Petroleum will now receive 1.68 shares of LinnCo LLC (NASDAQ:LNCO) compared to the original offer of 1.25 shares. However Linn Energy will require paying total of $4.9 billion that is about $600 million more compared to the initial offer. The companies plan to schedule a meeting around mid-December for their respective shareholders to vote on the proposed transaction following the amended merger agreement. The transaction is anticipated to be tax free to Berry Petroleum’s shareholders.
The proposed merger would result in one of the largest independent oil and gas companies in North America with about 1 Billions of Cubic Feet equivalent production per day and proved reserves of about 6.6 Trillions of Cubic Feet equivalent with estimated 54% liquids.
The Chairman, President and CEO of Linn Energy LLC (NASDAQ:LINE), Mark E. Ellis said that since the company’s engagement with Berry Petroleum, their operations have continuously outperformed the expectations and are also evident through their 3Q13 results. In a joint statement, the CEO of Linn Energy and the President and CEO of Berry Petroleum, Robert F. Heinemann, said, “The boards and management teams of LINN and Berry remain committed to completing this merger. We continue to believe that, upon completion, this transaction will create tremendous value for LINN Energy, LinnCo and Berry investors.”
Following the transaction, Berry Petroleum would be converted into a limited liability company and subsequently it will be contributed to Linn Energy in exchange for Linn units, allowing the latter to acquire Berry’s assets without any immediate tax payment.