July 25, 2016 / 11:07 AM / 2 years ago

SunEdison unit TerraForm Power adopts poison pill

(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.

The headquarters of SunEdison is shown in Belmont, California April 6, 2016. REUTERS/Noah Berger

Brookfield Asset Management Inc and hedge fund Appaloosa plan to jointly bid for SunEdison's stake in TerraForm Power, according to a regulatory filing on Friday. (bit.ly/2a5w44D)

TerraForm Power shares rose 6.7 percent to $13.34 in light premarket trading on Monday.

All Class B shares of TerraForm Power are owned by SunEdison, while its Class A shares are held by the public, 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 Oct. 31, 2015.

The rights plan is also aimed at fending off Brookfield Asset Management’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 Asset Management 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

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