the spread between LNCO and LINE just reached 4.42, the difference in yield over 0.7%
for comparison- the spread between EEQ and EEP is 0.00 (although it has been as high as 2), and the spread between KMP and KMP is 1.46 (although it has been near 10, with today's spread bouncing off a multiyear low, FWIW)
so the disparity seen in the LNCO-LINE spread, while relatively extreme at the moment (LNCO is now priced as much higher than LINE as it was below LNCO shares were first issued) is not unheard of and, although these kinds of spreads tend to even out over time, those reversion-to-the-mean swings can take months or longer. And, based on Kinder Morgan's history, the LINE-LNCO spread could go substantially higher, as astonishing as it seems
what is also astonishing to me is the (1.25 x LNCO - BRY) spread just reached 5.1 (with a low near 2, post-acquisition), the level it was a couple days BEFORE LINE announced its acquisition of BRY! If the spread between LINE and LNCO wasn't so extreme I'd say the market is signaling the BRY deal is falling apart LOL
As you point out, the difference in acquisition price is currently over $4.40 per share or about 11.5% higher for LNCO for a slightly smaller distribution to boot! Whatever the reason, that seems seriously out of line. If one calculates the yield based on acquisition cost, I suspect that the difference in yield on LNCO is substantially lower than the 0.07% you mention.