(Bloomberg) -- Pattern Energy Group Inc., a power producer that owns wind and solar farms in the U.S., Canada and Japan, is exploring options including a sale after receiving takeover interest, according to people familiar with the matter. The shares rose.
The San Francisco-based company is working with a financial adviser after drawing interest from suitors including Brookfield Asset Management Inc., which has floated the idea of merging the company with TerraForm Power Inc., said the people, who asked to not be identified because the matter isn't public. Brookfield owns about 65% of TerraForm Power, according to data compiled by Bloomberg.
Talks are ongoing, no decision has been made and the company could opt to remain independent, the people said.
Pattern rose more than 11% on the news, its largest intraday gain since December 2015. The shares were up 7.3% to $25 at 3:43 p.m. in New York trading, giving the company a market value of about $2.5 billion. It had $2.5 billion in total debt at June 30, according to data compiled Bloomberg.
Representatives for Pattern Energy Brookfield and TerraForm Power declined to comment.
Pattern Energy has 26 wind and solar energy projects in the U.S., Canada and Japan, as well as additional development projects in Mexico, according to its website. It went public in 2013 as a so-called yieldco, or renewable power company that doles out much of the cash it collects from electricity sales as dividends to investors.
Yieldcos fell out of favor with investors about four years ago after some of them faltered.
(Updates share price in fourth paragraph.)
--With assistance from Brian Eckhouse.
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