LINN Throws Down Secondary Offering Gauntlet (LINE)

LINN Energy, LLC (NASDAQ: LINE) is going to be ultra-active on Thursday after the news broke after the close on Wednesday.  The company announced that it plans a public secondary offering of 17,000,000 units of its LLC interests under its shelf registration statement.

All interests are being sold by the company and the use of proceeds is as follows: Net proceeds from the offering are expected to be used to repay a portion of the indebtedness outstanding under the Company’s revolving credit facility.

The underwriters of the offering come to a huge group: Wells Fargo; Barclays Capital; BofA Merrill Lynch; Citigroup; Raymond James; RBC Capital Markets; UBS; Credit Suisse; Goldman Sachs; and J.P. Morgan.  LINN noted that it will also grant the underwriters a 30-day option to purchase up to an additional 2,550,000 units.

At the $37.70 closing price, the proceeds before fees would come to $640 million versus a market cap of $6.66 billion.  LINN units are down around $36.70 in the after-hours and the 52-week trading range is $31.03 to $41.13.  LINN currently has an annualized dividend-equivalent payout rate of about 7.25%.