HOUSTON (AP) — Linn Energy is buying the drilling company Berry Petroleum Co. for stock worth about $2.5 billion.
Linn, an oil and gas producer, said Thursday that the deal will broaden its presence in California, the Permian Basin, Texas and the Rockies and boost its production by 30 percent. Its estimated proved reserves will be increased by 34 percent.
As part of the transaction, a Linn affiliate will issue 1.25 shares for each outstanding Berry share. That values Denver-based Berry's stock at almost $46.24 per share, a 19.8 percent premium to Berry's closing price on Wednesday.
The companies value the deal at $4.3 billion including assumed debt.
Berry will be converted into a limited liability company as part of the transaction and Linn affiliate LinnCo will give the Berry assets to Linn Energy in exchange for units of Linn Energy. LinnCo, based in Houston, went public in October.
Linn said that the acquisition is expected to add more than 40 cents per unit in the first full year after the buyout is complete. The company also said it plans to recommend that its board raise its quarterly dividend by 6 percent to 77 cents per unit from 72.5 cents per unit.
The combined company will be based in Houston.
The companies' boards unanimously approved the deal. It still needs approval from the companies' shareholders. The acquisition is expected to close by June 30.
Berry's stock jumped $6.66, or 17.3 percent, to $45.25 in premarket trading. Shares of Linn Energy gained 55 cents to $37.20, while LinnCo's stock rose 66 cents to $37.65.
Wyo., ND Governors To EPA: Hey, We Need More Time On Clean Power Plan Regulations Because You Totally ‘Blindsided’ Us | Matt Vespa
House Democrats Will Try To Dissolve Select Committee On Benghazi Tonight UPDATE: Voted Down, Committee Remains | Matt Vespa
The truth about gun deaths: numbers and actual solutions
Ted Cruz finds a question that the Sierra Club DARED not answer. | RedState
Homeowner Stops Three Robbers By Pleading For Mercy. Just Kidding. He Shot Them. - Bearing Arms - Guns Saving Lives, Texas
- MSNBC’s Chris Hayes: The Problem is the Constitution
Second data storage firm emerges with possible cloud backups of Hillary Clinton's emails - twitchy.com
Thomas Sowell - Charlatans and Sheep
Why Conservatives Elected to Congress Turn Into Moderates | Human Events