Linn Energy LLC (LINE:US), the oil and natural gas partnership that agreed to buy Berry Petroleum Co. in February, fell the most in at least three years after disclosing a U.S. Securities and Exchange Commission inquiry of the transaction.
Linn, based in Houston, dropped 9.6 percent to $30.10 at 8:24 a.m. before regular trading began in New York. As of yesterday, Linn had declined 5.5 percent this year.
Commission staff notified the partnership of a “private, non-public inquiry” of Linn and affiliate LinnCo LLC (LNCO:US), the companies said in a statement after markets closed yesterday. Investigators want documents preserved that relate to the Berry deal as well as hedging strategies and certain financial measures, according to the statement.
“The SEC has stated that the fact of the inquiry should not be construed as an indication that the SEC or its staff has a negative view of any entity, individual security,” Linn said in the statement. “The impact of the inquiry on the timing of LinnCo’s proposed merger with Berry Petroleum Co. (BRY:US) is difficult to predict.”
Berry agreed to be bought by Linn for $2.42 billion in stock. The companies, which are cooperating with the probe, said they remain committed to closing the transaction.
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