The Appaloosa-Vivint Solar Case Is Over. What's It Mean For Solar Investors?
Deutsche Bank’s Vishal Shah said that one of the biggest overhangs on the shares of Sunedison Inc (NYSE: SUNE) had been lifted with the Appaloosa ruling. He maintained a Buy rating on the company, with a price target of $6.50.
Delaware Chancery Court Judge Andre Bouchard ruled against Appaloosa and denied a preliminary injunction to stop the sale and transfer of the operating assets of Vivint Solar Inc (NYSE: VSLR) in connection with the company’s proposed acquisition. This removes a major obstacle to the closing of the deal, analyst Vishal Shah said.
“As reported in media outlets, the judge suggested that plaintiffs raised meaningful concerns about the transaction but couldn't prove the deal would cause immediate harm to TERP investors,” Shah wrote. Meanwhile, Vivint’s shareholders voted in favor of the deal on February 25, which cleared another hurdle for deal closure.
Terming the Appaloosa case as “one of the biggest overhangs” on SunEdison’s shares, Shah mentioned that a favorable decision had cleared the way for the company to close the Vivint acquisition and focus on execution. He expects the deal to close by March 18.
Following this, there could be “one of two scenarios playing out,” the analyst commented. Either SunEdison would find a buyer for Vivint’s operating assets or TerraForm Power Inc (NASDAQ: TERP) would be required to buy these assets. He believes the probability of SunEdison finding a buyer for these assets is high, and this would be a significant positive for SunEdison and TerraForm.
Deutsche Bank has a Buy rating and price target of $18 for TerraForm, and a Neutral rating for Vivint, with a price target of $16.50.
Latest Ratings for SUNE
|Mar 2016||Axiom Capital||Maintains||Sell|
|Mar 2016||Stifel Nicolaus||Terminates||Hold|
|Mar 2016||Avondale Partners||Downgrades||Market Outperform||Market Perform|
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