Appaloosa Seeks to Block SunEdison’s (SUNE) Vivint Solar Inc (VSLR) Acquisition


The merry-go-round continues today as the hedge fund, Appaloosa Management LP, run by David Tepper, has sued Sunedison Inc. (NYSE:SUNE) in order to stop their yieldco, TerraForm Power Inc, from purchasing the assets of Vivint Solar Inc (NYSE:VSLR). The move comes after weeks of Tepper and Appaloosa warning Sunedison not to go through with the acquistion. Appaloosa and funds which are affiliated with them own approximately 9.5% of TerraForm Power’s class A shares.

“Although Appaloosa served a revised demand and was attempting in good faith to resolve the company’s objections, it has thus far been unable to do so,” Appaloosa explained.

Sunedison Inc. (NYSE:SUNE) had originally agreed to purchases Vivint Solar Inc (NYSE:VSLR) in July. It will be interesting to see how this lawsuit plays into the share price of Sunedison’s stock over the coming weeks and months, as the stock is already down significant’y over the last several months.The stock is down 5.08% or $0.48 following the news, hitting $8.96 per share. Approximately 147,627 shares traded hands. VSLR shares have declined 28.43% since June 9, 2015 and are currently downtrending. It has underperformed the S&P500 by 20.95%.

From a total of 2 analysts covering Vivint Solar (NYSE:VSLR) stock, 0 rate it a “Buy”, 0 a “Sell”, and 2 a “Hold”. This means that 0 of the ratings are positive. Vivint Solar was the topic of 2 analyst reports since July 21, 2015 according to the firm StockzIntelligence Inc. Northland Capital downgraded shares on July 21 to a “Market Perform” rating.

The institutional sentiment decreased to 1.02 in Q2 2015. It’s down 0.25, from 1.27 in 2015Q2. The ratio turned negative, as 22 funds sold all their Vivint Solar Inc shares they owned while 22 reduced their positions. 25 funds bought stakes while 20 increased their total positions. Institutions now own 100.33 million shares which is 2.11% less than the previous share count of 102.49 million in 2015Q2.

Blackstone Group L.P. holds 2.77% of its total portfolio in Vivint Solar Inc, equating to 82.36 million shares. Canyon Capital Advisors Llc owns 8.46 million shares representing 2.43% of their total US portfolio. Moreover, Sandell Asset Management Corp has 1.18% of their total portfolio invested in the company, equating to 726,500 shares. The New York-based Sandell Investment Services Llc has a total of 0.92% of their portfolio invested in the stock. Alpine Associates Management Inc., a New Jersey-based fund reported 1.61 million shares owned.

Vivint Solar, Inc. is a provider of distributed solar energy, which is electricity generated by a solar energy system installed at customers’ locations. The company has a market cap of $954.58 million. Through its investment funds, the Company owns an interest in the solar energy systems it installs and ownership of the solar energy systems allows it and the other fund investors to benefit from various local, state and federal incentives. It has 49.31 P/E ratio. The Firm obtains financing based on these cash flows and incentives.