SunEdison's yieldco to pay less for Vivint Solar's assets

Wed Dec 9, 2015 11:44am EST
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(Reuters) - SunEdison Inc's SUNE.N yieldco will now buy Vivint Solar Inc's (VSLR.N: Quote) rooftop solar assets for a smaller amount, bowing to pressure from activist hedge fund Appaloosa Management.

SunEdison's stock rallied as much as 27 percent after the company said it received a $250 million loan from Blackstone Group LP (BX.N: Quote).

Shares of the yieldco, TerraForm Power Inc TERP.O, also jumped nearly 34 percent.

Appaloosa's David Tepper has been calling on TerraForm Power to "resist" the Vivint deal, saying it was a departure from the company's business model and would put shareholders at risk.

Yieldcos typically have long-term agreements to sell power to utilities, which bring in more stable cash flows than residential solar assets.

SunEdison, which will buy Vivint and then drop down some assets into TerraForm Power, is also cutting its purchase price to $15.25 per share from $16.50.

Under the new merger agreement, Vivint can also solicit competing offers, while SunEdison is free to look for third-party buyers for the assets it was originally supposed to drop down into TerraForm Power.

SunEdison has said it will slow asset sales to its two "yieldcos", battering shares of the company as well as those of its yieldcos this year.

The company cut the cash portion of its offer for Vivint by $2.00 to $7.89 per share, while raising the stock component by 75 cents per share.   Continued...

Vivint Solar technicians install solar panels on the roof of a house in Mission Viejo, California October 25, 2013.  REUTERS/Mario Anzuoni