Tesla board forms special committee to study taking company private

The board of electric carmaker Tesla Inc (NASDAQ:TSLA) said Tuesday it has formed a special committee of three independent directors to evaluate the controversial proposal by CEO Elon Musk to take the company private. 

In a statement, Tesla said the committee is composed of Brad Buss, Robyn Denholm and Linda Johnson Rice.

There are “no assurances (that) can be given regarding the likelihood, terms and details of any proposal or potential going private transaction” being accepted or completed by the panel, it said.

Musk faced a firestorm of controversy after unleashing a string of tweets that he wants to take the company private.

READ: Tesla faces SEC probe after Elon Musk’s tweetstorm about going private, says WSJ

Tesla said the special committee “has not yet received a formal proposal from Mr. Musk regarding any Going Private Transaction nor has it reached any conclusion as to the advisability or feasibility of such a transaction.”

The special committee has retained Latham & Watkins LLP as its legal counsel and intends to retain an independent financial advisor to assist in its review of a formal proposal once it is received. Tesla itself has separately retained Wilson Sonsini Goodrich & Rosati as its legal counsel in this matter.

Shares of Tesla were trading at US$353.13, down 0.9%, in early dealings on Tuesday.

READ: Musk claims funding for Tesla going-private deal will be done with equity as Saudis eager to proceed

The committee will have the full power and authority from Tesla’s board “to take any and all actions” on its behalf “as it deems necessary to evaluate and negotiate a potential Going Private Transaction and alternatives to any transaction proposed by Mr. Musk.”

The panel expects to provide a further update concerning the process associated with Mr. Musk’s proposal “as soon as practicable,” the statement said.

Musk believes going private will benefit the company’s stockholders. Aside from heading the carmaker, Musk is also chief of SpaceX, a developer of space craft to lower transportation costs into near Earth orbit and the eventual colonization of Mars.

Story by ProactiveInvestors