SolarCity Forms Special Committee to Review Tesla Offer
June 27 2016 - 6:20PM
Dow Jones News
SolarCity Corp. formed a special committee to evaluate an
acquisition offer made by Tesla Motors Inc., addressing potential
conflicts with directors with overlapping interests in the
companies.
Tesla last week made an all-stock offer to purchase SolarCity
for up to $2.8 billion.
The solar-power provider said Skadden, Arps, Slate, Meagher
& Flom LLP will serve as legal counsel and Lazard Asset
Management LLC will be the financial adviser assisting the special
board committee.
The committee is made up of Donald Kendall and Nancy Pfund, two
of SolarCity's directors that don't have any special connections to
Tesla.
Tesla and SolarCity have numerous overlapping interests on their
boards. Elon Musk is the largest shareholder in both firms, with
more than 20% holdings in each, and he is chairman of both
companies. His cousins Lyndon and Peter Rive are the founders of
SolarCity, and both sit on the SolarCity board. In addition,
Tesla's co-founder, JB Straubel is on SolarCity's board and
investor Antonio Gracias sits on the board of both companies.
According to a statement from SolarCity, the special committee
has "exclusive authority to evaluate SolarCity's long-term business
plan and stand-alone opportunities for value creation against a
broad range of strategic alternatives."
Mr. Musk last week said "disinterested" shareholders of both
companies would have to approve the deal, meaning he wouldn't vote.
It is unclear which other parties might be excluded from such a
vote.
Following the offer, Tesla's shares fell by more than 10% and
some investors and analysts expressed concern about the deal.
Write to Mike Ramsey at michael.ramsey@wsj.com
(END) Dow Jones Newswires
June 27, 2016 18:05 ET (22:05 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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