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TerraForm Power pursuing squeeze out for remaining Saeta Yield shares

TerraForm Power Inc. plans to pursue a statutory squeeze out to acquire the remaining 5% of Saeta Yield SA shares, expecting the closing July 3.

Spain's National Securities Market Commission already confirmed a 95% acceptance of its tender offer to acquire all Saeta Yield shares. The closing date for the 95% stake is set for June 12.

Under a "squeeze out," which is also referred to as a "freeze out," majority shareholders pressure minority shareholders to surrender their shares in a company in return for compensation.

TerraForm Power is paying $1.2 billion for Saeta Yield. It plans to fund the purchase price with a private placement of $650 million of class A stock with sponsor Brookfield Asset Management Inc. or its affiliates, and through available liquidity.

Saeta Yield owns assets primarily in Western Europe, including 778 MW of onshore wind and 250 MW of concentrated solar. TerraForm Power expects the acquisition to be highly accretive, with returns on equity in excess of its target.

"With 100% of Saeta's assets integrated into the TerraForm Power platform, we will be able to accelerate the realization of operational and financial synergies and will enjoy an expanded platform for growth in Europe," TerraForm Power CEO John Stinebaugh said in a June 8 news release.