BRY 1 share = 1.68 shares of LNCO. 0r 1.68 X 31.64 = 53.15 BRY currently trades at 50.66. Difference is $2.49 less dividend difference (.2416 - .08) = $2.33 or 4.6% Spread should go away after closing date is announced.
I really do not see any borrowing but just the "Berry" effect. To keep it simple:
Using Berry's latest 9 month filling, you get cash from:
+212,217,000 Depre & Amort
+85,280,000 Def Tax
=419,473,000 Total cash for 9 months from Berry
=46,608,000 Additional monthly cash from Berry
- 21,390,000 New stock div for Berry shares 52,700,000 X 1.68 X .2416
=25,218,000 Amount available for all units
/323,745,000 Number of units after merger
=$.0779 additional monthly amount available after merger for all shares
So if the Company decides to give this to unit holders, distribution goes from $.2416 to $.3195 a month or $3.83 a year yielding 12.7% at the current price. I look for a 4thQ 2014 rate of $.30 a unit and a 8% yield making the units trading at $45 and the guy who drove the price down to $20 to say he is leaving the firm to spend more time with his family.
Just an opinion. I have already purchased the units I intend to hold. Nothing more to be said but to say - have a nice weekend.
It may take a week but it will come. Brokers calling their clients today and tomorrow getting them to buy LINE and LNCO. People tripping over each other to get in. Shorts saying what ever they can but to no avail. $35 if Berry deal moves to likely. Just stating what all the longs already know.
It is beyond reason that there has been no response from the SEC one way or the other by now. All it causes is more uncertainty and is most likely holding up the BRY deal. I also own BRY and have not received anything about the vote. I am looking at dumping the BRY as I am not sure the new multiple above 1.25 is above the current price.