Clean energy giant SunEdison has had more good news that have sent its shares up over 35% in premarket trading, following a 37% jump on Thursday.
Late Thursday, a judge ruled that billionaire hedge fund manager David Tepper can’t block SunEdison’s (SUNE) plans to spend $1.9 billion acquiring solar installer Vivint Solar. At the time of Tepper’s lawsuit, he and his firm Appaloosa Management owned 9.5% of the outstanding class A shares of SunEdison’s subsidiary TerraForm Power, which SunEdison created to own clean energy projects.
The judge ruled that Tepper couldn’t prove that the terms of the Vivint Solar deal harmed shareholders, reports Bloomberg. SunEdison announced the deal to buy the solar installer last summer, but since then SunEdison’s shares have plummeted.
On Thursday shareholders of Vivint Solar approved SunEdison’s acquisition deal, pushing up its stock dramatically.
The spate of positive news is welcome relief for the beleaguered clean energy player. Last summer the company had just gone on a massive buying spree and its stock was trading at over $33 per share.
These are the economics behind clean energy:
However in the wake of the announcement of its Vivint Solar deal, SunEdison’s shares started to go into a free fall. The Street saw its acquisition binge as biting off more than it could chew. Now less than a year later, with its valuation crushed, SunEdison has been backing away from some of the deals that it originally made.
SunEdison walked away from a deal to buy Latin America Power, which owns and builds wind and hydro farms across South America. As a result, shareholders of Latin America Power sued SunEdison to stop the company from transferring assets. Latin America says it’s owed $150 million in arbitration.
Ironically, SunEdison might be better off without Vivint Solar and the companies could end up renegotiating terms of the deal.
