Exchange traded funds (ETFs) that provide exposure to the global solar energy sector rallied at Friday’s open after French energy giant Total (TOTF.PA) said it will purchase up to 60% of SunPower (NasdaqGS: SPWRA) for about $1.4 billion.

The offer at a big premium “is a validation for the solar sector and confirms the notion that valuations are compelling,” Jefferies analysts said in a note. SunPower shares rallied 40%.

“The take out is also validation for SunPower’s high efficiency technology, and gives Total the ability to realize a gain on its investment by keeping 40% of the company publicly traded,” they wrote. “We feel the stock can increase further, above the tender price, as a result of Total’s lowest cost of capital and project development business in 130 countries.”

SunPower ranks as a top holding in Guggenheim Solar ETF (NYSEArca: TAN) and Market Vectors Solar Energy ETF (NSYEArca: KWT) at between roughly 3% and 4% of assets.

Guggenheim Solar ETF gained more than 4% in early trading Friday. The ETF was up about 16% so far this year as of Thursday’s close.

Top holding First Solar (NasdaqGS: FSLR) rallied over 3% in early trading Friday

Guggenheim Solar ETF

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