Friday, April 29, 2011

Investopedia: Total Takes A Shine To SunPower

Admittedly, it does not take a lot to get conspiracy theorists fired up, but the deal announced Thursday night between Total SA (NYSE:TOT) and SunPower (Nasdaq: SPWRA) should have some of them foaming at the mouth. 


Many energy companies bought solar power companies in the 1970s and 1980s, only to find that the technology was far from a point where it was commercially viable (conspiracy theorists choose to believe that the energy companies deliberately "killed" solar power to maintain the hegemony of fossil fuel). Now the picture may be different. While solar still requires sizable subsidies to make economic sense in many places, the technology has gotten much better and solar assets may prove invaluable to energy companies looking to diversify and stay relevant for the long term. (For more, see Spotlight On Solar Stocks.)


The Terms of the Deal
While SunPower is characterizing the deal with Total as a "strategic partnership," the reality is that Total will be acquiring 60% of the company's shares and will effectively control the company's board. For this, the company is paying $23.25 per share (nearly $1.4 billion in total), a 45% premium to Thursday's close.

Total is also extending $1 billion in credit support to help accelerate the growth of the company (and this has been a chronically capital-hungry industry). 



Please click below for the full column:
http://stocks.investopedia.com/stock-analysis/2011/Total-Takes-A-Shine-To-SunPower-TOT-SPWRA-FSLR-TSL-AMRS-STP-YGE0429.aspx

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