Tesla creates committee to assess Musk proposal to go private

Tesla creates committee to assess Musk proposal to go private
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Tesla has created a special committee to consider taking the company private.

The move, announced on Tuesday, follows a tweet from CEO Elon Musk last week saying that he had secured funding to take Tesla private at $420 a share, valuing it at $72 billion.

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The special committee comprises of independent directors Brad Buss, Robyn Denholm and Linda Johnson Rice. It has retained Latham & Watkins LLP as its legal counsel and will also retain an independent financial adviser to review a formal proposal.

Corporate governance and shareholder voting advisers Glass Lewis and Institutional Shareholder Services, however, have said that they don’t consider Buss to be “independent” because of his ties to Solar City, the solar panel business Tesla acquired in 2016, according to Reuters.

In a statement announcing the committee, Tesla said that it could not comment on the likelihood of the company going private.

Musk previously said that the idea to take Tesla private was prompted by a meeting the Saudi Arabian sovereign wealth fund on July 31, when the managing director of the fund “strongly expressed his support for funding a going private transaction for Tesla.”

Musk wrote in an internal letter in August that he would like to restructure Tesla to be more like his commercial space travel company, SpaceX.

"Basically, I’m trying to accomplish an outcome where Tesla can operate at its best, free from as much distraction and short-term thinking as possible, and where there is as little change for all of our investors, including all of our employees, as possible," Musk wrote.