Brookfield Proposes Taking Over TerraForm Power and Global
Scott Deveau scottdeveau
Brian Eckhouse brianreports
November 10, 2016 — 2:38 PM EST
Updated on November 10, 2016 — 6:09 PM EST
- Canada asset manager adds TerraForm Global as part of a deal
- Firm floated 2 scenarios with TerraForm Global board members
Brookfield Asset Management Inc., Canada’s largest alternative asset manager, met with members of TerraForm Global Inc.’s board this week to discuss the possibility of buying the company as part of a deal to acquire TerraForm Power Inc., according to regulatory filings.
Toronto-based Brookfield discussed two transactions with TerraForm Global’s board members, the filings show. One would include Brookfield purchasing all the outstanding Class A and Class B shares in TerraForm’s companies, which would stay publicly listed. Brookfield would replace bankrupt SunEdison Inc. as a sponsor of the companies.
In the second scenario, Brookfield would buy the TerraForms outright for cash. Brookfield didn’t express interest in acquiring TerraForm Global on its own, the filings show.
“Nothing was agreed at the meeting, and no specific prices were discussed,” Brookfield said in the filings.
A representative of Brookfield declined to comment, while spokesmen for the TerraForm companies and SunEdison didn’t immediately respond to requests for comment.
Previously, Brookfield and its partners tried to take over TerraForm Power, a separate yieldco of SunEdison. SunEdison soon kicked off a formal auction for the company.
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TerraForm Power climbed 6.9 percent Thursday to $12.42 in New York. TerraForm Global rose 6.7 percent to $4.
Sachin Shah, chief executive of Brookfield Renewable Partners, the publicly traded renewable energy arm of Brookfield, reiterated last week that it wouldn’t participate in the formal auction of TerraForm Power because of concerns it had about the process.
“We continue to be on the outside, although we remain in a constructive dialogue,” Shah said on a conference call last week. “We are the largest shareholder from a Class A shareholder perspective with the company. We’re constructive, we maintain a dialogue, but we are not in the formal process,” he said.
“We like the company, we like the assets. We’re going to be a shareholder a very long time, and we think we can work constructively with the company, its board and the bankruptcy estate to come to a resolution in the near term.”
Clean Energy
TerraForm Power, which owns assets in more developed countries including the U.S. and the U.K., has drawn strong interest from major clean-energy players including funds of BlackRock Inc., D.E. Shaw & Co. and Golden Concord Holdings Ltd. It’s said to be the linchpin for a potential SunEdison reorganization.
Before Brookfield’s disclosure Thursday, there was no known public interest in TerraForm Global, which owns assets in emerging markets such as Brazil, India and China. Analysts weren’t convinced a buyer for all of TerraForm Global would come forward.
“It is hard to find one investor who’s interested in all of those geographic regions,” Swami Venkataraman, an analyst at Moody’s Investors Service, said before Brookfield’s expression of interest. “While you may find somebody in India, and somebody in Brazil and somebody in China, it certainly is harder to find someone who is interested in all regions.”
SunEdison founded and controlled the TerraForms, yieldcos that own operating wind and solar farms. SunEdison’s Class B shares in TerraForm Power give it about 84 percent of the voting rights while holding about 35 percent of the total shares outstanding, according to a July 26 regulatory filing.
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