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

Posted August 15, 2018

Musk broke silence in a blog post Monday after several days of speculations on how he is going to privatize Tesla following his announcement on Twitter on August 7 that he was considering taking Tesla private at a price of 420 USA dollars per share.

Yeagar's filing reiterates what much of what the prior suits allege: That despite affirmative statements from Musk of having secured proper investment to go private, no such plans had been made.

Elon Musk has confirmed plans to take Tesla private with the backing of a Saudi Arabian sovereign wealth fund.

What's more, a deal would likely prompt a review but the Committee on Foreign Investments in the USA, noted the paper. Reports that it would cost US$70 billion to take Tesla private, Musk said, were a stretch, adding that it would actually cost less than that.

"Obviously, the Saudi sovereign fund has more than enough capital needed to execute on such a transaction", he wrote.

The committee has the authority to evaluate and negotiate a potential deal, or any alternatives proposed by Mr. Musk, on the board's behalf, Tesla said.

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.

Goldman declined to comment on Tuesday. On Monday Tesla was hit with a third lawsuit, which alleged that Musk's tweet was meant to manipulate the price of the company's stock.

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

California-based Tesla has become one of the most valuable automakers on expectations it will disrupt the industry, although it produced only slightly more than 100,000 vehicles past year.

Tesla founder Elon Musk has confirmed that he is closely working with Goldman Sachs and private-equity firm Silver Lake to take the electric carmaker private - a deal that would need almost $70 billion in funding. 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.

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.

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.

One director, Steve Jurvetson, is now on leave of absence following allegations of sexual harassment.

Musk's tweets announcing his intentions to take the company private have prompted a backlash from some investors.

The special committee has retained lawyers - Latham & Watkins - in addition to a legal team used by the company.

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