Brookfield Asset Management Offers to Acquire TerraForm Power Inc (NASDAQ:TERP) for $1.6 Billion


Canada’s largest alternative-asset management firm Brookfield Asset Management has submitted four alternative proposals to acquire TerraForm Power Inc (NASDAQ:TERP), a spun-off unit of renewable energy company SunEdison, which filed for bankruptcy on November 20. According to the new proposals, Brookfield Asset Management is ready to acquire all of the outstanding shares of TerraForm Power for $11.50, or $1.6 billion. The investment firm has given another option according to which it would replace SunEdison as the sponsor and controlling shareholder of TerraForm Power. Brookfield Asset Management also said that it is ready to raise the buyout offer to $12.50 per share in cash if it can acquire TerraForm Global Inc(NASDAQ:GLBL), SunEdison’s other “yieldco”. A yieldco is a company that generates cash from a group of assets and then pays dividends to investors.

Back in November, in a letter to TerraForm’s shareholders, the Toronto-based hedge fund had offered $13 per share to acquire TerraForm Global Inc(NASDAQ:GLBL). Brookfield Asset Management and its subsidiaries collectively own about 12.2% of TerraForm’s total float. If we take into account the position of Appaloosa Management, which Brookfield called a “partner” in the November letter, the ownership goes to a 34%. Brookfield had proposed to acquire about 50%-60% of TerraForm’s shares then.

Last week, TerraForm Power said it sold some of its projects in the UK to a renewable energy investment platform of the Egyptian bank EFG Hermes for about $580 million. The sold solar projects have the energy capacity of 365 MW. These projects were installed in the UK by SunEdison during 2014 and 2015.

In December 2016, TerraForm Power (NASDAQ:TERP) reported fiscal first quarter loss of $0.01, better than the estimates of $0.86, while revenue in the period came in at $154 million, versus the consensus estimate of $115.39 million. The stock has lost over 59% over the last five years. As of the end of the third quarter of 2016, D. E. Shaw owns 6.08 million shares of TerraForm Power (NASDAQ:TERP), while Phill Gross and Robert Atchinson’s Adage Capital Management owns 2.75 million shares of the company.

Free books, reports and subscriptions...