Brookfield Renewables has announced that it has made a non-binding, all-share proposal to acquire the outstanding shares of TerraForm Power
Brookfield Renewables Partners has announced that it has made a non-binding, all-share proposal to acquire the outstanding Class A common shares of TerraForm Power, other than the 62 percent owned by Brookfield Renewable and its affiliates.
Pursuant to the proposed transaction, each Class A common share of TerraForm Power would be acquired, on a tax-deferred basis, for consideration equivalent to 0.36 of a Brookfield Renewable unit. Consideration for the transaction will be in the form of Class A shares of Brookfield Renewable Corporation. The proposal values TerraForm Power at USD 17.31, representing an 11 percent premium to the closing share price of TerraForm Power on January 10, 2020.
The proposed transaction would strengthen Brookfield Renewable’s position as one of the largest publicly-traded, globally-diversified, multi-technology, pure-play renewable power platforms with USD 50 billion in total power assets, an equity capitalisation of approximately USD 16 billion and a 20-year track record delivering 18 percent annualised returns to unit-holders since inception with consistent, stable distribution growth.
“We believe this transaction will create significant value for investors in both companies through a simplified corporate structure and continued sponsorship from Brookfield Asset Management,” said Sachin Shah, CEO of Brookfield Renewable. “For Brookfield Renewable unitholders, this transaction is expected to be immediately accretive and further expands our portfolio in North America and Western Europe, all while delivering returns in-line with our targets. Further, the proposed transaction will enhance the liquidity of the BEPC shares.”
He continued, “TerraForm Power shareholders, in turn, will benefit from access to a broader growth mandate that includes global, multi-technology and development opportunities, and increased access to capital and liquidity, underpinned by an investment-grade balance sheet.”
As previously announced, Brookfield Renewable intends to make a special distribution of BEPC shares to its unit-holders. The BEPC shares will be structured with the intention of providing an economic return equivalent to Brookfield Renewable units, including identical distributions, and will be exchangeable, at the shareholder’s option, for Brookfield Renewable units on a one-for-one basis. As such, the proposed transaction would allow TerraForm Power shareholders to acquire economic exposure to Brookfield Renewable through shares of a corporation.