* Berry shareholders to now get 1.68 LinnCo shares, up from
* Deal valued at $4.9 bln, including debt
* Berry shares up about 11 pct
Nov 4 U.S. oil and gas producer Linn Energy LLC
raised its purchase price for Berry Petroleum Co
by $600 million to $4.9 billion, the companies said.
The higher price follows a drop in the share price of LinnCo
LLC, a holding company set up by Linn for acquisitions.
Under the new agreement, Berry shareholders will receive
1.68 LinnCo shares for each Berry share they hold. This is
higher than the original offer of 1.25 shares.
At LinnCo's Friday close of $33.21, the offer implies $55.79
for each Berry share. The revised offer price represents a 14
percent premium to Berry's Friday close of $48.75.
Berry shares rose 11 percent to $54, while Linn shares were
up 2.4 percent in early trading on Monday.
"Berry's management had continued to support the merger, but
it was certainly cognizant of the fact that current LinnCo
trading levels did not provide sufficient valuation for Berry
under the old deal terms," Wells Fargo Securities analysts wrote
in a note to clients.
Shares of LinnCo, which only owns Linn units and has no
assets or operations, dropped 10 percent through Friday close
since the deal was announced on Feb. 21.
Berry shares rose 26 percent during the same period.
The Securities and Exchange Commission began an inquiry in
July related to the deal as well as Linn and LinnCo's hedging
strategies and certain other financial measures.
The boards of the three companies have approved the deal,
but it remains subject to shareholder approvals.
The deal is the first acquisition of a corporation by an oil
and gas producer structured as a master limited partnership or a
limited liability company.
Berry will be converted into a limited liability company,
allowing Linn to own Berry's assets in a pass-through entity
without any immediate payment of tax.
Analysts said enhanced prospects for the Berry's Wolfcamp
acreage in the Permian Basin in Texas could also be a reason for
the increased purchase price.
Berry increased production from its Permian assets by 22
percent in the third quarter.
Linn has said that acquiring Berry will help it raise its
output by a third and boost its oil reserves.