Tesla forms panel to assess Musk proposal to go private
SAN FRANCISCO — Tesla is forming a special committee to evaluate proposals to take the company private one week after CEO Elon Musk said he was considering it.
The committee, made up of three independent directors, said Tuesday that it has not received any formal proposal from Musk, who on Aug. 7 tweeted that he had “funding secured” to buy Tesla shares at $420 per share.
But a blog post by Musk on Monday cast doubt on whether the funding has been secured, leading to a government inquiry and at least two class-action lawsuits alleging securities violations.
Shares of Tesla jumped 11 percent in a day, raising the value of the company by $6 billion. Shares have fallen from those highs, but remain elevated.
According to Musk, his tweet came shortly after a meeting with the managing director of Saudi Arabia's Public Investment Fund, who encouraged him to pursue the buyout.
In what could add to Musk's headaches, at least two shareholder advisory firms have recently called into question the objectivity of one of the directors on the newly created committee, Brad Buss, who will assess any buyout proposals alongside Robyn Denholm and Linda Johnson Rice.
A report put out shortly before Tesla's annual meeting in June by Institutional Shareholder Services concluded that Buss's past role as chief financial officer of SolarCity should disqualify him from service on any key board panel at Tesla. SolarCity is a solar panel maker that Tesla bought for $2.6 billion in 2016.
In its separate report, Glass Lewis asserted that Buss was so conflicted that it would have advised shareholders against reelecting him as a director if he had been on this year's ballot.
Analysts have estimated the proposal to take the company private could cost from $25 billion to $50 billion.