UPDATE: KeyBanc Downgrades Berry Petroleum Company to Hold, Removes PT Following Takeout Bid
In a report published Friday, KeyBanc downgraded its rating on Berry Petroleum Company (NYSE: BRY) from Buy to Hold, and removed its $50.00 price target.
KeyBanc noted, “We are downgrading our rating on Berry Petroleum (BRY-NYSE) to HOLD from BUY following the takeout bid by Linn Energy (LINE) in an all stock transaction that valued BRY at $46.24/share based on the February 20, 2013 closing price of LINE at $36.65/share, representing a 20% premium to the prior day closing price. LINE has proposed offering 1.25 shares of its common stock for each share of BRY, valuing the Company at $4.3 billion (including the assumption of debt), implying $107,500/flowing boe/d of production, $15.58/boe of proved reserves, $6.79/boe of resource potential, and 7.0x our 2013E EBITDAX, which compares to the PXP acquisition in December 2012 that garnered $91,066/flowing boe/d of production, $29.11/boe of proved reserves, and 4.35x 2013E EBITDAX, though PXP included offshore Gulf of Mexico production that typically receives a lower valuation.”
Berry Petroleum Company closed on Thursday at $46.02.
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