Please ensure Javascript is enabled for purposes of website accessibility

Why TerraForm Global Inc's Shares Popped 17% Today

By Travis Hoium - Updated Mar 7, 2017 at 10:34AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

After months of speculation, a buyout is finally in TerraForm Global's future.

What happened 

Shares of yieldco TerraForm Global Inc (NASDAQ: GLBL) popped as much as 16.5% in trading Tuesday after announcing it will be bought out by Brookfield Asset Management Inc (BAM 2.88%). At 11:10 a.m. EST, shares maintained a 15.9% gain for the day. 

So what

Brookfield has agreed to pay $5.10 per share in cash for TerraForm Global as part of a deal to buy the yieldco and controlling interest in its sister yieldco, TerraForm Power. This ends over a year of uncertainty for the yieldcos and, in the case of TerraForm Global, will take it off the market altogether. 

A solar farm at dusk.

Image source: Getty Images.

There will be a vote of shareholders, but considering the premium Brookfield is paying -- and the fact that there were concerns that TerraForm Global would survive at all -- this is about as good of an outcome as investors could expect. 

Now what

There's a small amount of upside for investors who hold onto shares until the buyout is completed, but it may be time to take some shares off the table. It's unlikely the offer will be increased given the fact that management has been spending months soliciting offers from potential buyers. And Brookfield will want to move forward quickly with restructuring the company and its debt to provide value long term. This is one yieldco that will be in better hands after a buyout, ending months of speculation about its future. 

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Brookfield Asset Management Inc. Stock Quote
Brookfield Asset Management Inc.
BAM
$45.65 (2.88%) $1.28

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
336%
 
S&P 500 Returns
115%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 06/25/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.