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Monday's Energy Stocks: TerraForm Power climbs on poison pill adoption


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Monday's Energy Stocks: TerraForm Power climbs on poison pill adoption

advanced 4%in heavy trading to close at $13 on Monday, July 25, after a stockholder protection rightsplan to fend off a potential hostile takeover of the company.

Themove came in response to SunEdison Inc.'s potential sale of a significant equitystake in TerraForm Power and the announced accumulation of TerraForm Powerclass A shares by BrookfieldAsset Management Inc. and Appaloosa Management LP.

"TerraFormPower (TERP: Caa1/B-) unveiled a poison pill that would dilute a singleshareholder that attempts to accumulate more than 15% of its Class A commonstock and we view the move as only increasing the potential takeover premiumand not entirely preventing a 'bear hug' takeover attempt," CreditSightsanalysts wrote in response to the announcement.

Meanwhile,SunEdison separately announced it is exploring possible monetization of itscontrolling class B stake in TerraForm Power and Shares ofTerraForm Global gained 5.38% in brisk volume to end at $3.72.

Followingan analyst upgrade,Exelon Corp. rose0.24% in light volume to finish at $37.50. Deutsche Bank Securities Inc. raisedits opinion on Exelon shares to "buy" from "hold" andraised the price target to $39 from $36.

"Weare putting [Exelon] back on the Buy list as we view this genuine hybrid nameas a way to add exposure to a superior regulated growth story at a discountedvaluation," Deutsche Bank analyst Jonathan Arnold said.

lifted 0.25%in weak trading to close at $36.60. S&P Global Ratings has and itsunregulated affiliates on CreditWatch with negative implications tied to the"substantial" $1.51 billion pretax impairment charge the competitivebusiness will incur from the deactivation of several Ohio coal units.

"Whilethe charges are noncash, they underscore the diminishing value and cash flowsfrom the competitive merchant power supply business," S&P Ratings said.

fell0.12% to $33.06 and Phillips 66Partners LP lost 1.12% to $53.99, both in weak trading, afteragreeing to acquireequity interests in ExplorerPipeline Co.

Amongother midstream stocks, Enterprise Products Partners LP fell 1.42% in lighttrading to close at $29.10 and Kinder Morgan Inc. slid 1.70% in thin volume to finishat $20.86. The SNL Midstream Energy Index lost 1.34% to 117.66.

Incoal stocks, CNX Coal ResourcesLP lifted 0.09% in below-average trading to close at $10.98 afterreporting net incomeof $2.6 million and adjusted EBITDA of $13.3 million. The gains came with salesvolume at the highest levels since the first quarter of 2015, CNX said in itsearnings report.

"Wehave achieved significant cost reductions through productivity improvements,headcount reductions and extracting value from suppliers," Jimmy Brock,CEO of CNX's general partners, said. "This has helped us reposition themines to successfully compete and gain market share even outside of our coreregions while many of our competitors remain in financial distress."

shed 1.53%in weak volume to finish at $1.93 after entering an amended agreement with certain bondholdersand other interested parties, including Murray Energy Corp. The agreement supports a proposedglobal restructuring of the partnership's debt, equity matters and corporategovernance.

TheSNL Coal Index rose 0.25% to 60.39.

Movingfrom $2.728/MMBtu to $2.818/MMBtu on the day, the August gas futures contract,which rolls off the board at the close of business Wednesday, settled at$2.747/MMBtu on Monday, down 3.0 cents on profit taking. September gas futuresended the session at $2.712/MMBtu, easing 3.1 cents.

TheDow Jones Industrial Average dropped 0.42% to 18,493.06 and the S&P 500shed 0.30% to 2,168.48.

Market prices and indexvalues are current as of the time of publication and are subject to change.