SunEdison unit adopts poison pill to block Brookfield: Reuters

SunEdison Inc‘s (SUNEQ.PK) unit TerraForm Power Inc (TERP.O) said it had adopted a shareholders rights plan to prevent any sale of a significant number of Class A shares in the company.

Canada’s Brookfield Asset Management Inc and U.S. hedge fund Appaloosa Management LP plan to jointly bid for SunEdison’s stake in TerraForm Power, according to a regulatory filing on Friday.

TerraForm Power shares rose 6.7 percent to US$13.34 in light pre-market trading on Monday.

All Class B shares of TerraForm Power are owned by SunEdison, while its Class A shares are held by the public investors, private investors and the company’s executives.

TerraForm Power had 80 million Class A shares and 60.4 million Class B shares outstanding as of October 31, 2015.

The rights plan is also aimed at fending off Brookfield’s accumulation of its Class A shares, TerraForm Power said in a statement on Monday.

Separately, SunEdison said it was working with TerraForm Power and its other yieldco, TerraForm Global Inc (GLBL.O), to explore “value creation options” for their Class B shares it holds.

The rights plan, popularly known as “poison pill”, will be triggered if a party takes 15 percent ownership of TerraForm Power.

Brookfield and Appaloosa own 12.13 percent and 9.54 percent of TerraForm Power’s class A shares, respectively, according to a filing.

(Reporting by Arathy S Nair and Amrutha Gayathri in Bengaluru; Editing by Kirti Pandey)

(This story has been edited by Kirk Falconer, editor of PE Hub Canada)

Photo courtesy of Reuters/Noah Berger