Seeking Alpha

Berry Petroleum (BRY) has cancelled the shareholder vote regarding the merger with Linn Energy...

Berry Petroleum (BRY) has cancelled the shareholder vote regarding the merger with Linn Energy (LINE) and LinnCO (LNCO). BRY -1.3% premarket. There's little action in either LINE or LNCO, but both tanked into the close yesterday.
Comments (48)
  • Is there any press release out?
    28 Jun 2013, 09:30 AM Reply Like
  • This would be a major short-term negative if true.
    28 Jun 2013, 09:32 AM Reply Like
  • Source? BRY hasn't released anything.
    28 Jun 2013, 09:44 AM Reply Like
  • Neither BRY, LNCO, or LINE have released any info. At least according to their websites.
    28 Jun 2013, 09:48 AM Reply Like
  • The link to the NYSE market data info is right in the news current
    28 Jun 2013, 10:06 AM Reply Like
  • Linn investor relations(Toni Montegut) has just confirmed to me, that the shareholder vote has not been canceled. "It is not true"
    28 Jun 2013, 10:20 AM Reply Like
  • So the NYSE is incorrect in saying the meeting is canceled on their website? The plot thickens...
    28 Jun 2013, 10:29 AM Reply Like
  • I am out.......sold my small position in LNCO. i have enough volatility in my life. Dont need the aggravation from an MLP.
    28 Jun 2013, 09:46 AM Reply Like
  • TFCAB! Enough Vol? too many girlfriends will do that to ya!
    28 Jun 2013, 12:54 PM Reply Like
  • i am an old man.......can only handle 1 redhead at a time now.!!
    28 Jun 2013, 05:00 PM Reply Like
  • Hopefully untrue. If accurate then very poorly handled by all companies.
    If inaccurate then terrible reporting by SA.
    Fire around a powder keg....
    28 Jun 2013, 09:54 AM Reply Like
  • Apparently Barron's released the info. So am skeptical...
    28 Jun 2013, 09:59 AM Reply Like
  • Blue Horseshoe hates LNCO
    29 Jun 2013, 02:47 AM Reply Like
  • It's because the Merger Proxy materials are not final yet, SEC needs to approve that S-4 prior to vote, so delay in meeting is totally expected
    28 Jun 2013, 10:09 AM Reply Like
  • Thanks Phillip. That certainly makes more sense. Are you aware of a fundamental issue regarding the Merger Proxy material? It would seem that this should have already been filed and the S-4 submitted. This deal has been in the hopper for awhile. Thanks.
    28 Jun 2013, 10:13 AM Reply Like
  • If so, then anticipation of this type of "news flash" would have been nice and perhaps mentioned in the merger update. Plays right into the shorts hands - and was probably anticipated by them as the short attack started yesterday and continues. Such excellent timing again argues against coincidence.
    28 Jun 2013, 10:21 AM Reply Like
  • wow, so all this was basically a non-event.
    28 Jun 2013, 10:35 AM Reply Like
  • That's what I thought. But since it was brought here as news, I figured maybe they meant the deal would be cancelled.
    28 Jun 2013, 12:25 PM Reply Like
  • Hey Guys,

     

    OK so a basic premise that I have is that headline writers never ever let the facts get in the way of a good headline.

     

    The public M&A process always involves submitting a draft S-4 to the SEC. The SEC then reviews the document and provides a Comment Letter back to the Company, its lawyers and bankers. They then update the draft of the S-4 and resubmit it to the SEC. The SEC then reviews the updated draft and can accept it as is OR provide another Comment Letter. The Comment Letter and review process will continue until the SEC Reviewer is satisfied and makes the filing effective. Once the filing / Proxy Materials are effective then there can be a Special Meeting (the meeting that was just postponed but caused all the excitement this morning) to vote on the transaction.

     

    Given the increased noise around this deal the SEC Reviewer probably had her/his boss call and say "Make sure you are adding value on this LINE/LNCO/BRY deal because it is making a bunch of headlines/noise on CNBC etc. and we need to look like we are doing our job." Plus the deal will be the first transaction ever where a structure like LNCO buys a C-Corp., being the first to do anything always involves the most brain damage, is the most expensive to get done (legal fees, etc.) and is always the most difficult.

     

    If your boss or better yet your CEO calls you directly with that pressure what would you do?

     

    Exactly, you'd go through and think of even more stuff to add to a Comment Letter to make the company provide additional information. This theory probably explains the updated info in the last draft S-4 (filed June 4) that Barron's then jumped on as "Line Comes Clean on Derivative Costs." http://on.barrons.com/...

     

    You know, make an exciting headline to generate traffic, which in turn impacts the amount of money that Barron's makes selling advertising. The company was simply just responding to the Comment Letter that had requested the additional detailed information. It's just how the SEC review process works.

     

    You absolutely cannot rush the SEC, they are a government agency tasked with protecting investors.

     

    The next excitement will occur when LINE files its 2Q13 financials around July 26. Anything that can be used against them will be used against them in the court of public opinion.

     

    Cheers,
    Phil
    28 Jun 2013, 01:12 PM Reply Like
  • Once again, "Blue Horseshoe hates..."
    29 Jun 2013, 02:50 AM Reply Like
  • Didn't LINE cancel their meeting recently, then it would stand to reason that BRY would need to postpone their meeting right? If they take it down, I'll be forced to buy more shares !! In a few years you'll be glad you ignored all the shorts.
    29 Jun 2013, 06:19 AM Reply Like
  • LINE didn't cancel their meeting, nor did Berry really. They postponed it because the SEC hasn't finished their work, and at this point the SEC hasn't given a date when they will be done (its an iterative process so its hard to give a final date), so since a date when they can proceed hasn't been determined, they haven't set a new date yet for the meetings (so they won't generate more "OMG the Meeting was Canceled!!!!!" headlines.
    1 Jul 2013, 06:57 AM Reply Like
  • I finally got through to the Linn IR folks.

     

    They answered the phone with "not true". Over 100 calls so far.

     

    The issue stems from the fact that the vote was supposed to occur in Q2 and today is the last day of Q2 with no vote. The vote was previously pushed back though as per an earlier announcment until Q3.

     

    They said that Bloomberg's "calendar" first announced the fact that the vote didn't take place, and then Seeking Alpha ran with it from there.
    28 Jun 2013, 10:36 AM Reply Like
  • Thanks for giving the details and clearing that up, that makes sense.
    28 Jun 2013, 10:45 AM Reply Like
  • CORRECTION: Berry Petroleum Reportedly Has POSTPONED, Not Cancelled Vote Regarding Linn Energy, LinnCO Merger
    BY Midnight Trader
    — 10:26 AM ET 06/28/2013
    In an earlier MT story it was stated that Berry Petroleum (BRY
    ) has cancelled the shareholder vote regarding the merger with Linn Energy (LINE) and LinnCO (LNCO) , according to NYSE data.
    But SeekingAlpha now reports: "The shareholder vote over the LINE, LNCO merger has not been cancelled (as appears on the NYSE site), but has instead been postponed until the SEC approves the proxy."
    28 Jun 2013, 11:11 AM Reply Like
  • That is good news, and its what I thought might be happening, good to have it confirmed.
    28 Jun 2013, 11:34 AM Reply Like
  • Nothing on the web about any activities for BRY.
    28 Jun 2013, 12:22 PM Reply Like
  • Shorts trying to make any headline to cover? The merger was pushed back to Q3, old news. How could we vote prior to SEC ruling?
    28 Jun 2013, 12:23 PM Reply Like
  • I cannot find anything on the LINE or BRY web sites. Nothing on any of the news feeds. Only site reporting this is SeekingAlpha.
    28 Jun 2013, 12:23 PM Reply Like
  • Is it to be rescheduled later or cancelled for good? Just because a meeting is cancelled doesn't mean the deal is off.
    28 Jun 2013, 12:23 PM Reply Like
  • Without Linn's offer, it would be hard to pay $35 for Berry. Opportunity sometimes smells like manure.
    28 Jun 2013, 12:24 PM Reply Like
  • Line has previously mentioned a delay in the closing until the 3rd quarter due to some SEC filings. There would be nothing to vote on if this is the case.
    28 Jun 2013, 12:24 PM Reply Like
  • This is all they are basing it on: http://bit.ly/11NMCkD

     

    It's just a proxy meeting notice that only says "cancelled" by Berry. Now, are they referring to the original "July 1" shareholder voting that they are cancelling, or are they referring to backing out of the deal altogether.

     

    One thing I can't imagine is Berry Petro straight up lying to Leon Cooperman, and they told him recently they were "very committed to the deal".

     

    We will see.... But for now, the shorts are capitalizing on it.
    28 Jun 2013, 12:24 PM Reply Like
  • postponed not cancelled see my post above.
    29 Jun 2013, 09:11 AM Reply Like
  • LINE IR told me earlier this week that they did not expect the vote until mid August. I asked because I heard a lot of conflicting information like Wells Fargo (I believe) saying in July. Maybe BRY had previously announced an earlier schedule. I believe if they were canceling merger, that would be stated in a press release- not just canceling a vote.
    28 Jun 2013, 12:35 PM Reply Like
  • The supposed new release was at 0928 this morning. It is 3:20 p.m. LNCO is up $.62 and LINE is up $.20

     

    Six hours later, Mr. Market apparently has not yet gotten the word
    28 Jun 2013, 03:21 PM Reply Like
  • UPDATE:

     

    JUST SAW THE CLARIFICATION. WHEW!
    28 Jun 2013, 03:43 PM Reply Like
  • The clarification came in about 10AM ET.
    28 Jun 2013, 06:24 PM Reply Like
  • Well, thanks for pointing out my tardiness. I'll try to be more promptly informed in the future.
    4 Jul 2013, 11:47 AM Reply Like
  • Again, total BS. First, a vote had never been scheduled; or, if it was, it was cancelled because of the need to file a second amended S-4 (S-4/A). The companies have now filed two amended S-4s, the last being June 4th, less than a week after announcing a delay in the merger.

     

    "HOUSTON and DENVER, May 31, 2013 (GLOBE NEWSWIRE) -- LINN Energy, LLC (Nasdaq:LINE), LinnCo, LLC (Nasdaq:LNCO) and Berry Petroleum Company (NYSE:BRY) today announced an update of the proposed timing of the pending merger transaction. The Registration Statement on Form S-4 remains under review by the Securities and Exchange Commission. The parties are working diligently to complete that process and anticipate filing a second amendment to the Form S-4 early next week. The parties now anticipate the shareholder and unitholder meetings to occur in the third quarter of 2013, with closing to follow shortly thereafter."

     

    Where does it say a meeting/vote have been scheduled? Nowhere.

     

    This is more shoddy journalism.

     

    I posted this late yesterday on yesterday's story re: LINE. I think it's a good summary of why all this noise is, in my opinion, just that, noise:

     

    ""Shares Offerings are Common for MLPs

     

    Many limited partnerships will periodically sell additional partnership shares in order to fund operations, and in some cases, to help fund their dividend payouts. On the whole, however, MLPs have very stable cash flow because of the nature of their businesses.

     

    Forget About Payout Ratio

     

    Payout ratio is a common tool used to evaluate a traditional company’s ability to maintain its current dividend payout level. This metric simply isn’t useful when it comes to MLPs, however.
    Remember, MLPs don’t actually pay dividends. Rather, their distributions are actually a return of capital. As a shareholder, you receive your portion of distributable cash from the partnership. Furthermore, payout ratio is based on earnings per share, which also does not apply to MLPs because of their unique company structure.

     

    The Best Way to Evaluate MLPs

     

    At Dividend.com, we look mainly at two factors when evaluating MLPs: yield and price performance. A recent history of distribution (dividend) increases is another element to consider, since it will indicate the partnership is growing its cash flow. A dividend yield of around 5% is a good starting point for your research.

     

    Conclusion

     

    Master Limited Partnerships can be a great addition to your portfolio, particularly for income investors. They offer high yields, make consistent distributions, and also can also provide capital gains over time. MLPs carry special tax consequences, however, and are generally not suitable for tax-advantaged retirement accounts."

     

    Have a good weekend, everyone.
    28 Jun 2013, 05:12 PM Reply Like
  • I would appreciate a response from Seeking Alpha regarding SA's process for vetting rumors that are reported as news. It appears that someone misinterpreted the NYSE document as containing something new (i.e. "shareholder meeting cancelled") when that postponement had been announced weeks ago. My question is whether this was gleaned (and thus mis-interpreted) by Seeking Alpha or whether it was reported by another news gathering agency and SA simply included the report in its newsfeed.

     

    I realize brevity is important when reporting breaking events, but the two sentences published as fact by Seeking Alpha could have been improved by "According to _________, Berry Petroleum has cancelled...." It is always tempting for a news agency (or an online service like SA) to try to "scoop" a story quickly rather than checking with the persons or companies involved. It was left to SA readers to do the verification, which proved that the SA story was false.

     

    The second sentence states that both LINE and LNCO "tanked" in late trading the day before, implying that price drop may be connected to the "cancelled" meeting. In fact, the broad market "tanked" during the final minutes of trading on Thursday. The drop in price was not unique to LINE/LNCO.

     

    We've all made statements we thought were true but turned out to be false. I can understand how it would happen, particularly in an environment that puts a priority on speed of delivery. Perhaps this incident will provide Seeking Alpha an opportunity to review the process of verifying data before rushing to publish it. At a minimum, SA could cite the source of the story (as illustrated above). I would rather be five or ten minutes late getting a story (that had been verified by the company) than quickly receiving an unverified story that turns out to be untrue. This is another unfortunate aspect of our high-speed trading world.
    28 Jun 2013, 09:30 PM Reply Like
  • Completely agree, couldn't have said it better myself.
    28 Jun 2013, 09:32 PM Reply Like
  • Just for an additional layer of clarity, this was $BRY's response, courtesy of my conversation with Zachary Bailey.

     

    "The vote on the merger has not been cancelled.

     

    Bloomberg said they were retracting their original article.

     

    The shareholder vote will take place once the proxy becomes effective.

     

    Note from my counsel:

     

    The original record date (disclosed in the prior S-4 filings) was May 13, 2013, and the new record date was set as June 24, 2013. The meeting can be held any time between 10 and 60 days after the record date. So, we have until August 23 to hold the meeting. If the review drags out further than that, we can again change the record date.

     

    Hope that helps. Thanks!
    Zach"
    29 Jun 2013, 09:18 AM Reply Like
  • Thanks, ES. Has anyone confirmed that Bloomberg was the source of the SA blurb?
    29 Jun 2013, 10:30 AM Reply Like
  • I never saw the article on Bloomberg(but heard on here of it), the only thing I saw that wasn't from blogs/forums was actually the NYSE proxy meeting notices. Which has subsequently been changed from "canceled" to "TBD".
    29 Jun 2013, 11:33 AM Reply Like
  • Every shareholder of BRY, LINE, LNCO should receive a handwritten personal apology from Mayor Bloomberg along with 2 tickets to a Broadway show.
    29 Jun 2013, 03:17 PM Reply Like
  • . . . and a coupon for a sugar-free beverage of their choice :-)
    2 Jul 2013, 02:59 PM Reply Like
  • Excellent idea, Chancer. I suggest Kinky Boots, a reluctant entrepreneur leads a business turn-around: http://bit.ly/1cBzzEh.
    29 Jun 2013, 09:25 PM Reply Like
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