Tesla forms committee to assess proposal to go private

Share

Last Tuesday, Musk tweeted that he was "considering taking Tesla private at $420", adding, "Funding secured". Funding to take the company private is apparently secured as well.

Musk has since attempted to calm things down by issuing a blog post Monday in which he expressed confidence that conversations with a Saudi sovereign wealth fund can lead to a deal.

That means three members of Tesla's board will now weigh whether it is advisable - or even feasible - to pursue what could be the biggest-ever go-private deal, and they are doing so before receiving a formal proposal from the CEO.

The Wall Street Journal reported last week that the U.S. Securities and Exchange Commission was investigating the announcement Musk disclosed on Twitter, in a bid to see whether his statements were misleading.

By going private, Tesla could operate without requirements for financial reports and other pressures of a publicly traded firm.

"Obviously, the Saudi sovereign fund has more than enough capital needed to execute on such a transaction", he wrote.

Musk's attempt to take the carmaker private requires approval from the committee, the filing by Tesla said. But Tesla's announcement appears to contradict Musk's August 7 tweet in which he said the "only reason why" the deal is not certain "is that it's contingent on a shareholder vote".

More news: Tiger Woods could be leading the PGA Championship, but he's not

Goldman declined to comment on Tuesday. They are still above $341.99, their closing price the day before Musk tweeted his plan to take Tesla private, which pushed the shares up 11 percent to an 11-month high.

The fund's managing director "strongly expressed his support for funding a going private transaction for Tesla", said Musk.

The Tesla board's special committee has hired Latham & Watkins LLP for legal counsel and plans to retain an independent financial adviser to assist its review, according to the statement. Tesla bought SolarCity that year. The company appears to be playing catch-up with Musk's assertions about the momentum behind a deal, highlighting the speed at which the proposed transaction is unfolding.

Rice, the first African-American and second woman to join the company's board, is the chairman of Johnson Publishing Co, home to Ebony and Jet magazines.

One director, Steve Jurvetson, is now on leave of absence.

Elon Musk said via Twitter on Monday evening that he was working with Goldman Sachs and Silver Lake as financial advisers on a proposal to take Tesla private.

Share