TerraForm Power, Global get serious with Brookfield

It has been no secret that TerraForm Power (NASDAQ: TERP) and Global (NASDAQ: GLBL) have been seeking a new sponsor and/or parent company to take over SunEdison’s role. And despite a low-ball bid from Brookfield Asset Management two weeks ago, today TerraForm Power and Global both announced agreements under which they are negotiating a buyout exclusively with the Canadian real estate and infrastructure company.

Under the agreements, Brookfield and TerraForm Power will seek to come to an agreement by February 22, at which time the exclusivity agreement will lapse, with a similar clause allowing expiration of the exclusivity agreement with TerraForm Global on March 7.

Before any union with Brookfield, the two unions are trying to tie up the loose ends of their messy divorce with SunEdison. Both TerraForm Power and Global have entered into separate MOUs towards settlement of their combined $3 billion in claims against SunEdison, which have been approved by the boards of the two yieldcos.

Under the deal, in exchange for the stock it holds in TerraForm Power and Global, SunEdison would receive consideration equal to 37% of the total paid to all of TerraForm’s shareholders, and 25% of the consideration paid to TerraForm Global shareholders. This would reflect the settlement of claims between the copmanies, the cancellation of incentive distribution rights, and other factors considered by the boards of the two yieldcos.

For its part, SunEdison would also let go of its claims on its former yieldcos and would work towards a final settlement agreement to be reached on or before January 27. The deal is also contingent upon TerraForm Power and Global being acquired by April 1, and will need to be approved by the courts which are overseeing SunEdison’s bankruptcy.