UPDATE 5-Vivint Solar terminates $2.2 bln merger with SunEdison

Tue Mar 8, 2016 6:25pm EST
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* SunEdison agreed to buy Vivint for cash and stock in July

* SunEdison "yieldco" TerraForm Power was to buy Vivint assets

* Deal faced criticism from hedge funds, other investors

* SunEdison shares up 33 pct, Vivint's hit record low (Adds details from lawsuit, background)

By Amrutha Gayathri

March 8 (Reuters) - Solar panel installer Vivint Solar Inc said on Tuesday it had terminated a deal to be taken over by solar energy company SunEdison Inc 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.   Continued...