SEC Probes Linn Energy (LINE) and Linn Co (LNCO) Over Buyout of Berry Petroleum, Shares Fall

By on July 2, 2013

Linn Energy LLC (NASDAQ: LINE) announced that the Securities and Exchange Commission (SEC) has initiated an investigation into the company and its affiliate Linn Co LLC (NASDAQ: LNCO) about their planned acquisition of Berry Petroleum Co and other financial matters.

Linn Energy fell 18.4% in intraday trading.

Linn Co, which went public in October at $36.50 per share, fell 16.5% in intraday trading to just over $30 per share.

Linn Energy, which agreed to acquire Berry for $2.5 billion in stock in February, said the consequences of the probe were difficult to predict.

The SEC requested documents on the merger, hedging strategy and use of non-U.S. generally accepted accounting principles, or non-GAAP, measures, Linn Energy announced.

According to a Street.com article, concerns about the ability of Linn Energy to finance its large dividend and its accounting practices have resulted in considerable volatility in the company’s stock and its all-stock exchange with Berry.

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