SunEdison May Complete Vivint Deal in March, Deutsche Bank Says

  • Delaware judge rejected plea for TerraForm injunction Thursday
  • Tepper's Appaloosa may request a hearing as early as Monday

SunEdison Inc.may complete its $1.9 billion acquisition of Vivint Solar Inc. in mid-March after a Delaware judge rejected a shareholder’s plea to prevent a key portion of the transaction, according to a Deutsche Bank AG analyst. That part of the deal may no longer be necessary.

As part of the complicated acquisition, SunEdison’s TerraForm Power Inc. holding company has agreed to pay $799 million for some Vivint assets. That’s the part of the transaction that was challenged in court, and Delaware Chancery Court Judge Andre Bouchard declined Thursday to impose an injunction.

SunEdison, the world’s biggest clean-energy developer, rallied 31 percent Friday. Vivint rose 35 percent, the biggest gain since the acquisition was announced in July.

The decision means SunEdison can move forward, and Deutsche Bank analyst Vishal Shah said in a research note Friday that he expects the sale to close by March 18. SunEdison has also been shopping those assets to other potential buyers, and may end up selling them to someone else.

“We believe there is a high probability that SunEdison is able to find a buyer for these assets,” Shah wrote. That “would be a significant positive for TerraForm and SunEdison.”

Tepper’s Suit

Tepper’s Appaloosa Management LP is TerraForm’s third-biggest shareholder, and he criticized the Vivint deal, saying that selling the assets to TerraForm is better for SunEdison than for TerraForm. He sued to block that part of the deal last month.

Even if the assets go to another buyer, a deal would probably spur more scrutiny of TerraForm management unless the new buyer can match the price, said Sven Eenmaa, an analyst at Stifel Financial Corp.

“If they did sell it at a lower price, that just proves that Appaloosa’s concerns were right,” Eenmaa said in an interview.

Tepper is considering options after the ruling and has begun reviewing a transcript of a conference call, he said in a phone interview Friday. That may include moving forward with the lawsuit even as SunEdison tries to close the deal with Vivint.

“We’ll have a response on Monday,” Tepper said.

Before it's here, it's on the Bloomberg Terminal.