This is ridiculus. Line can pick up better assets and continue to generate revs without the bry deal. Sure IF the whole mess with the SEC and Hedgeye had not happened the deal would be done and Line would have benefitted nicely. Too bad, looks like that will not happen. bry needs line far more than line needs bry, as they are in debt up to their eyeballs , and a short term squeeze on prices could cripple them. Sadly, the SEC is another feckless government body that has no need to act in a timely fashion. So line is screwed. Move on.
I kind of have to respectfully disagree with you here. BRY does need to be acquired, this is true. They have good assets but too much debt. I believe the run up in price has little to do with their execution and a lot more to do with their attractiveness as a takeover target, since the herd mentality is that because this did not go through on the original schedule, it's failed for good. They don't however need to be acquired by LINE specifically. I'm sure there are others out there hungry to get their hands on the potential of the BRY holdings, though IIRC they were shopping with little to no action when LINE made a move for them. If you have a longer horizon, or are looking at LINE for it's dividend, it was made perfectly apparent that they are capable of closing deals to protect it, even during the inquiry, which furthered my opinion that this entire thing is now revolving around the S4. It also indicates that the management is taking steps to ensure that LINE moves forward, regardless of the due diligence of a unique acquisition like BRY.
While there is no love loss between myself and the SEC, I can almost understand what is going on here, and why this is taking a lot longer than was anticipated. IIRC, this is a new type of merger, so there is going to be a lot of scrutiny around it to ensure it can be done all legal like, and that the gooberment (who I believe the SEC is there to protect, not individual investors) gets their cut of the deal as well. Going forward if the groundwork is laid here, these types of deals can be stamped out like everything else. When you look at it that way, a lot of the changes, timelines and refillings (almost) make sense.
You also have to remember that a gooberment agency, really no matter what it does has no incentive to offer a superior service, because there is no one else to go to. It is basically a legal monopoly on certain services. Can that be changed though? Can the SEC functions be handled in the private sector? heh, no.
Post news of BRY 10Q : LINN/LNCO sp dropped 4.5% while BRY sp rose 0.73%. Sounds like the market likes BRY without LINN, but LINN will suffer w/o BRY.
Put the blame squarely on LINN mgmt. They wouldn't be where they are now if they had planned to acquire BRY without clean accounting books to begin with. Otherwise, why would they need to revise their S-4, and now had to change its accounting practice?
For being the largest upstream E&P mlp, LINN is an embarrassment. If you are thinking of buying an upstream, you are better off buying BBEP or VNR.
Actually, Berry will likely find another suitor. With oil at close to $100/bbl and decent prices available on the futures market going out 5 years, you might even see PE firms make a move on Berry.
It has some very good oily assets that won't go unnoticed.
I don't think a short term squeeze on prices will cripple Berry. Berry is producing prodigious amounts of free cash flow, which is why Linn is targeting them in the first place. A drop to $80/bbl would certainly hurt, but I think you have a case of wishful thinking more than anything else.