The following, although new language to the S-4, should not be unexpected:
from page 45:
The merger will not be completed on or prior to October 31, 2013 (the “End Date”). After the End Date, any of LINN, LinnCo or Berry may unilaterally terminate the merger agreement at any time prior to completion of the merger.
The merger will not be completed on or prior to the End Date, and although the merger agreement does not automatically terminate as of such date, any of LINN, LinnCo or Berry may unilaterally terminate the merger agreement at any time following such date prior to completion of the merger. Recently, Berry common stock and LinnCo common shares have traded in relationship to each other at a ratio in excess of the
exchange ratio. As a result, absent an amendment to the merger agreement that would increase the exchange ratio, it is possible that Berry could terminate the merger agreement after the End Date or that Berry stockholders would vote against the merger at the current exchange ratio at the meeting of Berry stockholders. Although LINN, LinnCo and Berry could potentially amend the merger agreement to, among other things, increase the exchange ratio and extend the End Date, there can be no assurances as to whether the parties will enter into negotiations with respect to or execute any such amendment or that the parties will refrain from exercising their rights to terminate the merger agreement.
Hmmm, nothing about how either can company can unilaterally extend the End Date. That language, in combination with the Berry note 11 phrasing, seems to indicate there is no such right, despite the wording of the agreement (as has been discussed here many times).
I read this as being Linn is merely going through the motions now, Berry is going to pull out. I don't when they'll announce it, Thursday or Friday would be earliest, one would think, and I don't know at this point how much of this is priced in. I must day the market reaction today caught me by surprise, I figured the positive Q3 report would merely stop the fall, but we're back close to $28. Of course that could pull back significantly by the close, and the week is young. But, if it holds in the $27-28 range and the deal dies, maybe one could argue for a more muted response, say down to the $24 level, rather than $22 as I earlier thought. I still see little reason to be optimistic about the deal, less so after reading the above.
ruby...My net take on everything is that Linn showed in Q3 it can stand on its own feet. Decent growth and coverage of the distribution. With Permian acquisition and its ability to drill and develop existing properties and to hit its numbers, Linn is a solid buy/hold and with or without BRY will price based on its $2.90 distribution...At 8.5% yield rate, that would price LINE at $34+. At a 9.5% yield rate, it would price at $30.53. Linn is not reserving any money for a possible negative outcome of the SEC informal inquiry, making me thing it's really no big deal. I do think that there's a pretty good chance that Linn and BRY will renegotiate the deal to sweeten it a little for BRY IF Linn thinks it makes sense to do so...and that it's good for Linn. If BRY walks and no deal is done, it's because Linn thinks it's best not to chase BRY...and that's good for Linn. Linn is not dumb (notwithstanding flubbed Q1- Q2) and has a sharp pencil. I believe Linn's prospects are now very positive, with or without BRY.
larry...I agree. Q-3 earnings report confirmed that LINE can support the distribution 100%+ and even more so going forward with the Permian acquisition and other productive drilling and well enhancements. I now see, absent BRY, a rock solid distribution with potential to increase in 2014. Linn has a very sharp pencil and will not over pay for BRY...If there is a negotiated adjustment of some kind in the terms of the merger, it will be because Linn believes it will be in Linn's best interests to do so. I feel more confident in LINE that I have in months.