Economy

Tesla go-private effort advances with special committee

Tesla go-private effort advances with special committee

He later tweeted he was working with buyout firm Silver Lake and investment bank Goldman Sachs Group Inc as financial advisers on his plan. 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". He said he had "funding secured" for a deal, but didn't say where the money would come from. Silver Lake and Goldman Sachs declined to comment.

Investigators in the Securities and Exchange Commission's San Francisco office are also scrutinizing Musk's moves.

"My best estimate right now is that approximately two-thirds of shares owned by all current investors would roll over into a private Tesla", he said.

The shares were last down 1.4 percent at $351.34 on Tuesday.

Musk said earlier on Monday that the manager of Saudi Arabia's sovereign wealth fund had voiced support for the company going private several times, including as recently as two weeks ago, but also said that talks continue with the fund and other investors. Tesla has a market capitalisation of $60 billion, bigger than Detroit rivals General Motors Co (GM.N) or Ford Motor Co (F.N), who produce far more cars. Musk allegedly admitted that he "was angry at the company's critics". They haven't reached any conclusion on whether taking Tesla private is advisable or feasible. Anything is possible from pulling something together to nothing. 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".

More news: Argentine Senate rejects legalizing elective abortion

The three-person team that will give the ultimate thumbs up consists of former SolarCity chief financial officer Brad Buss, former Sun Microsystems executive Robyn Denholm, and former MoneyGram board member Linda Johnson Rice.

So, should you buy, sell or short Tesla? 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. Rice, the first African-American and second woman to join the board, is CEO of Johnson Publishing Company and Chairman Emeritus of EBONY Media Holdings, the parent of EBONY and Jet brands, according to Tesla's website.

Apart from the Saudi sovereign fund, Musk said he is having talks with other potential investors about his privatization plan.

One director, Steve Jurvetson, is now on leave of absence following allegations of sexual harassment. A week later Musk tweeted, "Am considering taking Tesla private at $420". The committee has retained the services of a law firm, while Tesla has engaged a separate law firm to act as counsel.