Brookfield Renewable offers to buy TerraForm, valuing it at $4 billion

(Reuters) - Brookfield Renewable Partners BEP_u.TO said it would acquire the remaining 38% stake in TerraForm Power Inc TERP.O it does not already own, in a deal that values the electricity utility at $3.93 billion, as it looks to boost its power portfolio.

Brookfield Renewable said on Monday the all-stock offer represents an exchange ratio of 0.36 BRP units for each TerraForm class A share, valuing TerraForm at $17.31 per share, an 11% premium to the stock’s last close.

TerraForm said it has formed a special committee of non-executive, independent directors to review the unsolicited proposal it received on Saturday.

“There can be no assurance that a definitive proposal relating to the proposed transaction will be made, that any such proposal will be recommended or accepted by the committee,” TerraForm said in a separate statement.

The transaction is expected to be immediately accretive for Brookfield Renewable unitholders, and further expand the company’s portfolio in North America and Western Europe, said Brookfield Renewable.

The company, which is the renewables arm of Canada’s private equity firm Brookfield Asset Management, has $50 billion in total power assets.

(This story corrects headline to say “valuing it at” $4 billion, not “for”.)

Reporting by Arundhati Sarkar in Bengaluru; Editing by Shinjini Ganguli