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SunEdison’s TerraForm Chooses a Poison Pill Option in Its Looming Shareholder Battle

Views Of SunEdison Inc. Solar Headquarters Following Bankruptcy Filing And NYSE DelistingViews Of SunEdison Inc. Solar Headquarters Following Bankruptcy Filing And NYSE Delisting
SunEdison's TerraForm Power wants to block a potential sale of its Class A shares that could give control of the unit to outside forces.Photograph by David Paul — Bloomberg via Getty Images

SunEdison’s unit TerraForm Power said it had adopted a shareholders’ rights plan to prevent any sale of a significant number of Class A shares in the company.

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

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, 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% ownership of TerraForm Power.

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