If LNCO only sells 30.25 million shares with no overallotment at $36.50/share, that comes to $1.1B, not the $1.4B as hoped. If Linn units continue to trade higher, say $41, they will only be able to "buy" around 27 million units, or 3 million units less than planned.
Roger, the overallotment option is based on the $36.50 offering price, so it wouldn't surprise me if the underwriters are buying newly issued units from Linn and selling them fast. It's hard not to be cynical about those guys, whose driving force is greed.
The underwriters have the option to purchase up to an additional 4,537,500 common shares from LinnCo, at the same price, to cover over-allotments. The offering is expected to close on or about October 17, 2012, subject to customary closing conditions.
Hum - What would you do with a option for 4.5 million shares worth at least $1 each?
I really do hope Ron^3 comes back on which he should if I am really on ignore.
"A wide discount of LNCO to LINE is a good thing! Shows management is really good."
Real Americans out there. It is not the end of the earth but this went badly. Huge discount and underwriters not pre-selling their over-allotment option.
Please do not confuse the comedy central olb 'contribution' with rational folks looking out for their savings.
From the registration statement;
(c) The purchase by LinnCo of a number of Equity Interests in the Borrower equal to the number of LinnCo limited liability company interests sold in the IPO and in future equity offerings.
So if I understand correctly, LNCO will hold a unit of LINE for every share of LNCO