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Linn Energy (LINE -2%) says its Linn Co. unit filed plans for an IPO of up to $1B in common...

Linn Energy (LINE -2%) says its Linn Co. unit filed plans for an IPO of up to $1B in common stock; proceeds would be used for general corporate purposes, including financing its acquisition strategy, LINE says. The company has been on a buying spree, including today's acquisition of Jonah Field properties from BP for ~$1B.
Comments (5)
  • Dr Jan
    , contributor
    Comments (103) | Send Message
     
    Usually when MLPs issue new stock/units, the price goes down because folk erroneously believe that issuing new units pulls always(FN) down the market price of old units. If you believe that Linn management can put the new money to good use, then buy if the price goes down.
    FN: Always remember never to say always or never!
    25 Jun 2012, 11:51 AM Reply Like
  • flumeride
    , contributor
    Comments (276) | Send Message
     
    It is the dilution of the units that can cause the value of each unit to drop. The same profit divided by more units. Unless the profits rise, the dividend will decrease. So I generally don't like to see dilution of the units, but Linn has shown that it spends wisely. Hopefully the return from the Jonah Field properties will more than pay for the dilution.

     

    Reading the IPO announcement, the IPO is for a whole owned subsidiary, LinnCo, of Linn. LinnCo will then buy newly issued units in LINE. An interesting way of going about business.
    25 Jun 2012, 04:12 PM Reply Like
  • Doctor Dividend
    , contributor
    Comments (326) | Send Message
     
    Flumeride:

     

    So as you understand it, LinnCo will not be a public General Partner, like KMI did with KMR/KMP? I couldn't understand the press release of where LinnCo was inthe heirarchy.
    25 Jun 2012, 11:28 PM Reply Like
  • flumeride
    , contributor
    Comments (276) | Send Message
     
    I'm not familiar with the KMR/KMP set up, so I can't comment on that. However LinnCo will not be a general partner. There some other informative articles on SA discussing the plan. Here are a couple of articles I like.

     

    http://bit.ly/MnBZxR

     

    http://seekingalpha.co...
    26 Jun 2012, 04:22 PM Reply Like
  • A Newell
    , contributor
    Comments (486) | Send Message
     
    What could this IPO be for? Do you think they want to take over the world?
    26 Jun 2012, 01:55 AM Reply Like
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