Tesla board forms committee to consider going private

Gladys Abbott
August 14, 2018

Tesla Inc.'s directors formed a special committee to evaluate Chief Executive Elon Musk's suggestion of taking the electric-vehicle maker private, a move that comes amid questions about whether the board is sufficiently independent.

"No assurances can be given regarding the likelihood, terms and details of any proposal or potential Going Private Transaction, that any proposal made by Mr. Musk regarding a potential Going Private Transaction will be accepted by the special committee", it writes.

The first such suit was filed Friday by Tesla short seller Kalman Isaacs, who contended that the tweets were exclusively meant to manipulate the company's stock price - a move that's estimated to have cost Isaacs and those making similar bets upwards of $US1 billion ($1.4 billion). Musk says he has stayed in contact with the Saudi fund and has been reaching out to other investors ever since.

But a source said Silver Lake was offering its assistance to Musk without compensation and had not been hired as a financial adviser in an official capacity.

On August 2, Musk notified the Tesla board about his intention to take Tesla private at US$420 per share - a 20% premium.

More news: Meghan Markle wrote about being a princess on The Tig

"Despite Elon Musk's frustration with being a public company, I think there are more advantages to remaining public", said CFRA analyst Efraim Levy, citing cheaper access to capital and media exposure due to interest in a public company. He said the board's outside directors discussed going private without Musk or his brother Kimbal Musk, a board member, present.

California-based Tesla has become one of the most valuable automakers on expectations it will disrupt the industry, although it produced only slightly more than 100,000 vehicles previous year.

Buss served as chief financial officer of solar panel installer SolarCity for two years before retiring in 2016. Rice, the first African-American and second woman to join the board, is CEO of Johnson Publishing Company and Chairman Emeritus of EBONY Media Holdings, the parent of EBONY and Jet brands, according to Tesla's website.

One director, Steve Jurvetson, is now on leave of absence following allegations of sexual harassment. Funding to take the company private is apparently secured as well.

The special committee has retained lawyers - Latham & Watkins - in addition to a legal team used by the company. Wilson Sonsini Goodrich and Rosati will be legal counsel for Tesla itself.

Other reports by LeisureTravelAid

Discuss This Article

FOLLOW OUR NEWSPAPER