Tesla board forms independent group to explore going private


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

Earlier in the day, he said Saudi Arabia first approached him with interest in taking Tesla private early a year ago. Private equity firm Silver Lake is also not signed up officially as a financial adviser, as it is helping Musk explore how to take Tesla private with no compensation, Reuters reported on Monday.

A leveraged buyout of Tesla, which has a market capitalization of about $60 billion, would represent an abrupt change in financial strategy for a company that went public in 2010.

According to Musk, the Saudi sovereign fund expressed its interest in order to diversify from oil and "has more than enough capital needed to execute on such a transaction".

The committee hasn't yet received a formal proposal from Musk, who earlier this month tweeted that he had secured funding to take his electric-car company private.

"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. will be accepted by the special committee", the statement said. Musk says he has stayed in contact with the Saudi fund and has been reaching out to other investors ever since. Silver Lake contributed $1 billion for the 2013 Dell transaction. These comments sparked suspicion that Musk could be manipulating the stock price of Tesla, unless he was stating facts, and this suspicion in turn prompted the revelation.

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Tesla said the committee consists only of independent directors: Brad Buss, Robyn Denholm and Linda Johnson Rice.

Shares of Tesla Inc. jumped 11 percent in a day, raising the value of the company by $6 billion.

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.

Denholm, the first woman on Tesla's board, is chief operations officer of telecom firm Telstra and the ex-CFO of network gear maker Juniper Networks (JNPR.N).

Mashable Tech Editor Pete Pachal on the fallout from Tesla CEO Elon Musk's tweet about potentially taking the company private.