I stuck with Line through attacks by Barrons, Hedgeye, Seeking Alpha, but now I am losing confidence in Line Management.
This looks like desperation to make BRY deal.
BRY is over priced in market due to this deal. Now Line dilutes shareholders to over pay.
From 1.25 to 1.68 is a 34%+ increase.
I thought 1.50 would be too high. The only reason Line is offerring 1.68 is because they are giving in to whatever (1.68) BRY demands.
PLEASE VOTE AGAINST THIS DEAL AND KILL IT.
Show Line management some common sense.
I like the deal. all that lovely permian assets! I bought bry earlier when it was low instead of adding more line. near the bottom. The deal will resolve and eventually line\lnco will stabalize as everything proves itself.
The only dissapointment is how long its taking for everything to resolve.
When one company pays way too much for another company, it is a bad deal for the stockholders of both companies. Management ALWAYS seem to enrich themselves at the shareholders expense. A merger on these terms will result in way too much debt, too much dilution and way too little cash. Oil is going down while production is going up. LNCO stock is likely to be in the 20s--the market is already sending a message that this is a very BAD deal for LNCO and will be a bad deal for BRY stockholders also.
I am with you--all we can do is vote NO or simply sell out. We were sold out by mgmt. The market looks like it is beginning to see that this is a very bad deal for LNCO. When you add in the $1.5 billion in debt from BRY, it really stinks. Look for a dividend cut instead of any increases. Those new shares are really going to soak up a lot of our available dividend cash.
My vote is yes.
Much of the Barrons / Hedgeye thesis was predicated that $BRY deal would not get done. And if it doesn't, $LINE would not have the income to maintain its high payout, so such would need to cut, which will kill the stock in the near term. While I don't see it as grim at B&H, I do see their point about the aggressive payout. But w/ $BRY, their thesis dries up and blows away... and so will the shorts who entered on their recommendation and are already covering. Now that $LNCO has broken the falling resistance trendline, expect the squeeze to continue to the gap fill ~$36 and likely catching little resistance till the IPO price $36.75.
I spoke to IR in a phone call. Forget any dividend increase from the BRY deal.
There will be no (zip, zero, nada) dividend increase from the BRY deal even after all is digested.
Possible future dividend increases (if any) must come from improved performance or future acquisitions- but not from BRY deal. That was made clear in our phone conversation.
They said what the BRY deal does is provide better coverage for the current dividend but not an increase.
My conclusion is the increased price of the new deal killed any hope of any dividend increase soon.
I would have preferred getting the deal put to bed at the original offer but management no doubt sees a VERY positive side to getting the deal done sooner rather than later. A failed merger would see some sag in the LINE/LNCO price for at least a short term period. Finishing this will see both move incrementally higher back towards the IPO price of LNCO. All good things in my estimation.