Linn Energy LLC's proposed plans to buy Berry Petroleum Co. appear to be moving forward, which sent its shares soaring Wednesday.
The oil and gas company said Wednesday that it, along with its affiliate LinnCo LLC, received comments from the U.S. Securities and Exchange Commission on the proposed deal. The companies are working to file amended paperwork in response.
Linn Energy announced in February that it planned to buy Berry, a drilling company, in a stock deal worth about $2.5 billion, or $4.3 billion when including debt. In July, Linn said that the SEC had started a private inquiry related to the deal as well as Linn Energy and LinnCo's use of adjusted financial measures and a hedging strategy.
The company's announcement Wednesday provided no detail on what regulators said in their comments or when its response would be filed.
LinnEnergy, LinnCo and Berry also said they have set the record date for shareholder votes at Sept. 30.
Janney Capital Markets analyst Suzanne Hannigan said she views this action as "an expression of confidence" that this will be the final round of comments from the SEC and that the companies will soon have clearance to proceed with a shareholder vote.
Hannigan said the update is a positive development in a long SEC review process amid of a flurry of negative reports on Linn's hedging practices and accounting. The analyst maintained a "Neutral" rating on the stock pending the SEC's comments.
Shares of Linn Energy jumped $2.19, nearly 9 percent, to $26.93 by midmorning. The company's stock fell more than 30 percent in July when news of the investigation was made public and has yet to fully recover.
- Investment & Company Information
- Linn Energy