Tesla Board 'Totally Blindsided' by Musk's Suggestion to Take Company Private

Tesla Board 'Totally Blindsided' by Musk's Suggestion to Take Company Private

Tesla Board 'Totally Blindsided' by Musk's Suggestion to Take Company Private

Things aren't all rainbows and kittens at Tesla as the board forms a special committee to act on any potential proposal to go private from CEO Musk.

Goldman Sachs has always been a key adviser to Tesla, but the apparent involvement of Silver Lake, best known as a private-equity firm specializing in tech investments, is striking.

Musk said that since his Twitter post on the possibility of a deal the managing director of the Saudi fund had expressed support for proceeding, subject to financial and other due diligence. Reuters, citing a source, reported after the tweet that Silver Lake was not discussing participating as an investor in the deal and "was offering its assistance to Musk without compensation and had not been hired as a financial adviser in an official capacity". Silver Lake and Goldman Sachs declined to comment. They haven't reached any conclusion on whether taking Tesla private is advisable or feasible.

If and when Musk presents a plan to take Tesla private, the special committee has the authority to negotiate the transaction and ultimately to approve it, the company said.

That earlier tweet triggered investor lawsuits and an investigation by the U.S. Securities and Exchange Commission into the accuracy of his statement, according to multiple media reports. Musk explained in a longer post that he felt confident in going public with his plans after a meeting with Saudi Arabia's public investment fund, who own less than five percent of Tesla. But Tesla's announcement appears to contradict Musk's August 7 tweet in which he said the "only reason why" the deal is not certain "is that it's contingent on a shareholder vote".

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The problem? Many senior advisors were not aware of the photoshoot, and they ultimately banned her from sharing any of the images. She recorded the conversation when she was sacked and subsequently released that audio recording .

Shares in Tesla, which are still well below highs hit when Musk initially raised the prospect of the transaction last week, inched up 0.7% in trading before the bell. Musk expects two-thirds of shares to stay in Tesla.

The special committee is composed of independent directors Brad Buss, Robyn Denholm and Linda Johnson Rice.

Buss was chief financial officer of solar panel installer SolarCity for two years before retiring when Tesla paid $2.6 billion for the sales and installation firm in 2016. Tesla bought SolarCity that year. It was Tesla's last big deal and was criticized by some on Wall Street because the company, founded by two of Musk's cousins, had seen its business shrink before the takeover. Musk said that the Saudi Arabian sovereign wealth fund offered to fund the transaction, but he is also seeking additional investors before he develops a final proposal. A week later Musk tweeted, "Am considering taking Tesla private at $420".

Denholm, the first woman to join Tesla's board, is chief operations officer of telecom firm Telstra and the ex-CFO of network gear maker Juniper Networks. The company has separately retained Wilson Sonsini Goodrich & Rosati for legal counsel.

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