Vivint Solar terminates $2.2 billion merger with SunEdison

Tue Mar 8, 2016 6:26pm EST
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By Amrutha Gayathri

(Reuters) - Solar panel installer Vivint Solar Inc (VSLR.N: Quote) said on Tuesday it had terminated a deal to be taken over by solar energy company SunEdison Inc SUNE.N after SunEdison failed to close on the planned acquisition.

The cash-and-stock deal, worth $2.2 billion when it was forged last July, had faced criticism from hedge funds and other investors as SunEdison's finances and share price weakened.

SunEdison's stock rose as much as 33 percent to $2.53, while Vivint's fell as much as 22.6 percent to a record low of $4.03.

"SunEdison's borrowing constraints made it impossible for the company to complete the acquisition of Vivint," Raymond James analyst Pavel Molchanov said.

Later on Tuesday, Vivint filed a lawsuit against SunEdison in Delaware Chancery Court, alleging breach of contract.

In court documents, Vivint said SunEdison justified its failure to close the deal by saying it had failed to secure financing. The complaint said, however, that obtaining financing was not a condition to closing the merger agreement.

Vivint is controlled by Blackstone Group LP (BX.N: Quote).

SunEdison did not respond to requests for comment. The company has faced criticism for trying to grow too quickly through acquisitions that it could not afford.   Continued...

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