D.E. Shaw set to enter race for SunEdison's TerraForm Power: sources

By Jessica DiNapoli

Hedge fund manager D.E. Shaw & Co LP is weighing a bid for SunEdison Inc's (SUNEQ.PK) controlling stake in TerraForm Power Inc (TERP.O), the bankrupt U.S. renewable energy producer's most valuable asset, according to people familiar with the matter.

D.E. Shaw's emergence as a possible bidder for TerraForm Power indicates that the potential sale process for the so-called "Class B" shares of TerraForm Power, which was formed by SunEdison to buy and operate its solar and wind power plants, is likely to be competitive.

Another hedge fund, Appaloosa Management LP, and asset manager Brookfield Asset Management Inc (BAMa.TO), have already announced plans to jointly bid on SunEdison's TerraForm Power Class B shares.

D.E. Shaw's bid preparations have not been finalized and there is no certainty its bid will materialize, the people said. Spokespeople for SunEdison and TerraForm Power declined to comment. D.E. Shaw did not respond to a request for comment.

D.E. Shaw and its affiliates already own some of the publicly traded common shares of TerraForm Power. They received them in an agreement announced last year after forgiving debt owed by SunEdison, regulatory filings show.

D.E. Shaw said in a filing last week that it owned 6.7 percent of TerraForm Power's common shares, and added that it could participate in transactions that could result in a change of control or take-private transaction involving TerraForm Power. It did not however provide specific details.

Appaloosa and Brookfield also own some common shares in TerraForm Power. An affiliate of D.E. Shaw received court approval last month to buy a solar project of SunEdison's.

While accounting for only 35 percent of the total shares outstanding, the Class B shares in TerraForm Power that SunEdison owns correspond to about 84 percent of the voting rights in TerraForm Power.

Once the fastest-growing U.S. renewable energy company, SunEdison filed for Chapter 11 bankruptcy protection in April after a short-lived but aggressive binge of debt-fueled acquisitions proved unsustainable.

Since then, SunEdison has been selling off assets piecemeal as it decides which path its reorganization will take. It has not yet asked for court approval of a sale process for its stake in TerraForm Power, and referenced reorganizing around the shares as an option in a filing last week.

TerraForm Power, which has a market capitalization of $1.7 billion, is one of the two so-called "yield cos" that SunEdison has said it was exploring selling its stakes in. SunEdison is also considering selling its shares in TerraForm Global (GLBL.O), which has a market capitalization of $630 million.

Bloomberg News reported last week, citing anonymous sources, that Golden Concord Holdings Ltd, a Chinese clean energy company, was also planning to bid for SunEdison's controlling stake in TerraForm Power.

(Reporting by Jessica DiNapoli in New York; Editing by Alan Crosby)