Tesla, SolarCity close to merger agreement: report

Tesla Motors Inc and SolarCity Corp have made progress in putting together a deal that will merge the electric carmaker and the solar panel installer, people familiar with the matter said.

The two companies, which count billionaire Elon Musk as a major shareholder, are in the final stages of carrying out due diligence on each other and could agree on a deal in the coming days, though it is still possible that the negotiations could fail, the people said on Saturday.

It could not be learned whether SolarCity would be successful in including a provision in a merger agreement with Tesla that would allow it to continue to solicit bids from other potential buyers for a short period.

The sources asked not to be identified because the negotiations are confidential. Representatives for SolarCity and Tesla did not immediately respond to requests for comment.

Tesla announced in June that it had made an all- stock offer for SolarCity worth $ 2.8 billion. It said that by acquiring SolarCity, the companies would form company that could offer consumers solar panels, home battery storage and electric cars under a single trusted brand.

SolarCity has not publicly revealed its views on Tesla’s offer since it announced on June 27 that it had formed a special committee consisting of two board members to evaluate the offer.

The committee said it had retained legal and financial advisers and would review the proposal against SolarCity’s standalone prospects and a broad range of strategic alternatives.

As chief executive of Tesla, chairman of SolarCity and the biggest shareholder in both companies, Musk has recused himself from voting on the deal at both companies. Several Tesla and SolarCity executives, including Musk’s cousins SolarCity CEO Lyndon Rive and SolarCity board member Peter Rive, have also recused themselves from voting.