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TerraForm In Buyout Talks With Brookfield

Brookfield Terraform 012317

TerraForm Global, Inc. (GLBL), an operator of clean energy power plants, said Monday that it has signed an exclusivity agreement with Brookfield Asset Management Inc. (BAM,BAM-A.TO) to negotiate a potential business combination between them.

Shares of TerraForm Global are gaining more than 6 percent in pre-market activity following the announcement. The exclusivity agreement will expire on March 6.

Separately, TerraForm Global's publicly traded sister company, TerraForm Power, Inc. (TERP) also said it has entered into an exclusivity deal with Brookfield Asset Management regarding a potential transaction.

TerraForm Global noted that prior to entering into the exclusivity agreement, it received a revised bid letter from Brookfield. In its letter, Brookfield proposed four possible transactions that are not subject to any financing condition.

Under the terms being negotiated, Brookfield would either buy 100 percent of TerraForm Global for as much as $4.35 per share, or replace solar energy company SunEdison Inc. (SUNEQ) as TerraForm Global's sponsor and acquire 50.1 percent of the company's outstanding shares for as much as $4.25 per share.

However, TerraForm Global noted that any aggregate amounts payable to its shareholders will reflect the terms of a final settlement agreement, if any, between the company and SunEdison.

Brookfield's proposals are subject to certain conditions. This includes the negotiation of mutually acceptable definitive transaction documentation that addresses the treatment of potential liabilities previously disclosed by TerraForm Global.

The proposals are also conditional on a voting and support agreement with SunEdison, and the negotiation of a comprehensive settlement agreement between TerraForm Global and SunEdison that is acceptable to Brookfield.

TerraForm Global also said it has entered into a memorandum of understanding with SunEdison. The MOU outlines potential separate settlements of claims between SunEdison and TerraForm Global, and SunEdison and TerraForm Power in connection with SunEdison's Chapter 11 bankruptcy case.

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