Linn Secondary Discount Looks Mostly Fair (LINE)

Linn Energy, LLC (NASDAQ: LINE) priced its secondary offering for 17 million common units at $35.95 per unit, in-line with yesterday’s closing price.  The $611 million in gross proceeds before fees comes to a pre-sale market cap of $6.35 billion.  The units were also trading at about $37.75 when the proposed sale was first announced earlier this week.

All of the units are being sold by the company itself: “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.”

There is also a rather large underwriting group as the book-runners are as follows: Wells Fargo Securities, BofA Merrill Lynch, Barclays Capital, Citigroup, Raymond James, RBC Capital Markets, UBS Investment Bank, Credit Suisse, Goldman Sachs, and J.P. Morgan.  These underwriters will have an option to purchase up to 2,550,000 additional units from Linne Energy at the offering price.

The arbitrage and spread-betters are active so far with nearly 250,000 unites traded with more than an hour until the open.  Units are trading down 0.35% at $35.82 versus a 52-week range of $31.03 to $41.13.