The cash offer would see approximately 60 percent of SunPowers Class A and B common stock change hands at a price of $23.25 per share. The companies have also announced that they will waive the condition related to receipt of European Union competition law approval, signaling that, "all regulatory conditions of the completion of the tender offer are currently satisfied," they announced in a joint statement.
The deal is the largest ever single investment by an oil company in renewable energy with an estimated cost to Total of $1.37 billion. As a part of the deal, Total will supply SunPower with a further $1 billion in credit support over the next five years. The deal was announced in late May and is scheduled to expire on June 14.
SunPower has also released its second quarter (Q2) results and outlook for 2011. Repositioning in the Italian market still dominates Sunpowers strategy, as restructured government incentive systems favor residential and commercial installations rather than large-scale power plants. While SunPower claims this favors its strengths in rooftop and carport (R&C) installations, the fact that R&C installations yield less profit per watt than self-developed power plant projects was reflected in Q2 losses of between 30 to 50 cents per share.
This is the second consecutive loss posted by SunPower after a fourth quarter 2010 profit of $152.3 million. Gross revenue in Q2 2011 of $550 million to $600 million is up from $451.4 million in the first quarter 2011 and was also up on Q2 2010 revenue of $384.2 million, which had yielded a 0.06 cent loss per share.
SunPowers chief financial officer Dennis Arriola said, during a conference call with analysts, "were taking aggressive steps to actively manage our manufacturing and operating expenses, including working with suppliers to modify contracts to reflect current market conditions." Arriola added that the Total deal will be a factor over the remainder of the year, "the one billion credit support agreement with Total, position SunPower to gain market share profitably."
One-off expenses impacted on SunPowers Q2 2011 balance sheet, the Silicon Valley company also claimed, including between $14 million and $29 million related to their reallocation strategy in Italy and between $13 million and $15 million relating to the outstanding Total tender. There have been mixed reports as to the state of the solar industry thus far in 2011, and its a case of watch and wait for other major players to post their Q2 figures.