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Berry Petroleum Company, LLC Message Board

  • bjfcpainc bjfcpainc Sep 19, 2013 1:04 PM Flag

    Berry will have to renegotiate 1.5x in order to do the deal.

    I think the stage is being set for a renegotiation of terms closer to 1.5x.

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    • Linn should kill the deal and walk away. Better for Linn. Too many other good companies to buy out.

    • There is a lot of time between now and when a vote will occur in stock terms. When the S-4 is approved, the stock price differentials could move dramatically. Given how little these stocks trade, a couple of motivated parties could move them dollars in a day. Given a $4B+ deal, I suspect there might just be one or more such parties who will assure the prices are where they need to be when and if the time comes.

    • I guess I might as well put my two cents in since everyone else seems to have an opinion. I say the merger is approved. All this talk about a $6 loss is premature nonsense. The S-4 has yet to be approved. All that has happened is a record date for unit/shareholders to vote has been set for September 30th. There will be no vote on September 30th. Meetings to vote on the merger have yet to be scheduled. The vote may not take place until late October. Between now and then a lot of things are going to change. You even have LINE reporting earnings in late October and to get the merger approved I think you'll find it is a very positive report compared to the disappointing 2nd Quarter. If the earnings report is positive, LINE may even elect to report early before the vote. Also, even if the public earnings report has not come out before the vote, you can be sure the BRY management will know how BRY did in the Third Quarter and how LINE did in the Third Quarter. This information on production and future prospects will determine the vote, not the price of BRY and LINE a month before any decision is actually made. GLTA

      • 3 Replies to legalbark
      • Well, I said a lot of things would change. They certainly have. I suggested LINE might even report earnings earlier than normal and that seems to be what is happening. My vote is for a positive earnings report. Otherwise, why accelerate the process? GLTA

        Sentiment: Buy

      • Positive Q3....questionable. Q1 was bad, Q2 was horrible, but somehow Q3 will magically be good. What had LINN done other the past 3 months that had changed it's balance sheet where that paid out more in distributions than the revenue they generated from their wells?

        All I see was they took out another several hundred million dollar loan to buy a Permian asset. We see how 'good' the Q3 report will be....if the report is not good, then what? LINN share price drops even further, BRY:LNCO spreads further widens.....and somehow you magically believe holders will still vote 'yes'.

        I find it funny how these LINN posters repeatedly cite '"institutionals" as approving this deal hands down... like these "institutionals" enjoy losing money and cannot do simple arithmetic. And that LINN holders hope the merger will somehow break-even the share price back to its May collapse.

        I want to make a final point that LINN management is the worst I have ever seen for an MLP. Kind of makes me glad if the merger is voted down. I really don't want these ppl running Berry.

      • Correction to my earlier post. I meant to say the vote on the merger will depend on the fundamental operation results of BRY and LINE over the next several weeks, at a minium, plus future prospects and not the market prices today of BRY and LNCO- not LINE as I posted before. BRY shareholders get 1.25 LNCO shares for each BRY share- not LINE shares. GLTA

    • Dropping down $6 if it doesn't go through is utter nonsense. BRY was $39-40 pre-LINN merger announcement. It did popped up to $48 after the merger announcement, but now returned to its pre-merger announcement price.

      LNCO on the other hand, dropped over 30%. So, tell me, why would any sane BRY holder will lose $6/share in order to cover for LNCO's loss? No way. LINN is not the only upstream MLP out there looking for acquisition. The only thing tying BRY up is the merger contract that needs to be voted on by shareholders. The shareholders can always vote down a very, very bad deal, and another upstream MLP will gladly acquire BRY (moreso if BRY price falls) ie. BBEP, VNR.

      BRY has the huge Monterey Shale, and that is an asset I am sure MANY other MLPs will be gladly to buy. If I were LINN, I will not be so sure that BRY will be satisfied with a lousy 1.25 ratio when the spread widens each and every day.

    • Folks are better to take the merger! If it doesn't go through... the stock goes down $6... Same amount as the merger... but WITH the merger one picks up a huge dividend and then future growth of the combined. Looks better all the time.

    • If the merger does not go through, BRY stock will drop more than $6/share. Don't forget BRY shares popped when merger was announced.

    • The 1.25 ratio means LINN wants BRY shareholders to take the brunt.... I seriously doubt shareholder will take the hit for a bad deal that BRY management had arranged. If I am a BRY shareholder, there is no way I will take a $6 loss/share. Rather have the company pay the $80 M severance for a bad deal. LINN needs BRY more than BRY needs LINN. From the price action in LNCO and BRY these past few days, it says to me the deal is less than likely to go through. Setting the Sept 30 date for the vote does not guarantee that BRY shareholders will vote yes at the current 1.25 ratio.

    • There is no legal obligation for Linn to do so.

      • 1 Reply to rlp2451
      • There is no legal obligation but there is a moral obligation. If the voting was today then BRY shareholders would certainly vote no. And in turn they would be forced to pay Linn 84 million... but that is better than losing 6-7$ per share if the deal were to happen.

        I think it's too big a risk on Linn's part to not re-negotiate. It doesn't have to be 1.5x but it probably has to be better than 1.25x.

 

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