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Brookfield ready to buy out TerraForm Power at USD-1.6bn valuation

Wind farm. Author: Samir Luther. License: Creative Commons, Attribution-ShareAlike 2.0 Generic

January 11 (SeeNews) - Brookfield Asset Management Inc (TSE:BAM.A) has made alternative proposals to SunEdison’s (OTCMKTS:SUNEQ) two yieldcos, including for a takeover of TerraForm Power Inc (NASDAQ:TERP) at a pre-transaction equity value of USD 1.6 billion (EUR 1.52bn).

The Canadian asset manager, which currently holds a stake of 12.12% in TerraForm Power, said on Tuesday it has offered to pay USD 11.50 in cash for every share it does not already own in the firm.

In November, Brookfield expressed interest in buying out TerraForm Power for USD 13.00 in cash per TERP Class A or Class B share. Since then, TerraForm Power has announced a deal to sell a 365-MW portfolio of operational solar plants in the UK to Vortex Solar. The disposal was agreed at an enterprise value of about GBP 470 million (USD 570m/EUR 542m), including around GBP 300 million of debt.

In its latest regulatory filing from January 9, Brookfield says it is willing to raise the cash offer from USD 11.5 to USD 12.50 a share if thus it would take over both TerraForm Power and its sister company, TerraForm Global Inc (NASDAQ:GLBL).

Brookfield would also accept a sponsorship type of transaction in which it replaces SunEdison as TerraForm Power’s sponsor and also pours cash into the yieldco in exchange for newly issued stock that would increase its current stake to at least 50.1%. Incremental aggregate consideration will be offered if TerraForm Global is involved as well.

Brookfield noted that none of the proposed transactions is subject to any financing condition.

TerraForm Power has nearly 3 GW of wind and solar capacity, of which 2,364 MW are in the USA and the rest is in Canada, the UK and Chile. As of October 2016, TerraForm Global had 989.5 MW gross.

(USD 1.0 = EUR 0.951)

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Ivan is the mergers and acquisitions expert in Renewables Now with a passion for big deals and ambitious capacity plans.

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