Tesla directors: 'No formal proposal' to take company private

Tesla directors: 'No formal proposal' to take company private

Tesla directors: 'No formal proposal' to take company private

Musk's effort to associate his potential bid with some of Wall Street's most venerable institutions, even at the risk of misrepresenting their involvement, comes as pressure has been building on him to justify his pronouncement last week about the "secured" funding.

At about the same time he tweeted this, reports of the Saudi Arabian sovereign wealth fund taking an interest in the company, beyond just buying shares on the stock market, surfaced.

Since that unorthodox announcement on August 7, which has triggered investor lawsuits and an investigation by the U.S. Securities and Exchange Commission, Musk and Tesla have scrambled to bring order to the process of negotiating a deal.

Musk will work with Goldman Sachs and Silver Lake as financial advisors, the latter of which helped Michael Dell take his namesake computer firm private in 2013 in a $24.4 billion deal. The lawsuit alleges that Musk tweeted that message to boost Tesla's stock price and punish those investors who bet against the company.

He said he had "funding secured" for a deal, but didn't say where the money would come from.

The board has given the committee authority to act on its behalf, including negotiating a deal to take Tesla private.

On Monday, he said financing had been discussed with Saudi Arabia.

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Tesla announced on Tuesday that the board of directors has created a three-person special committee to consider taking the all-electric vehicle company private. The agency declined to comment.

Shares of Tesla Inc. jumped 11 percent in a day, raising the value of the company by $6 billion. 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.

The independent directors are Robyn Denholm, Brad Buss and Linda Johnson Rice.

But corporate governance and shareholder voting advisers Glass Lewis and Institutional Shareholder Services said they do not consider Buss an independent director, due to his connections to a solar panel business the company bought two years ago. The company appears to be playing catch-up with Musk's assertions about the momentum behind a deal, highlighting the speed at which the proposed transaction is unfolding.

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.

One director, Steve Jurvetson, is now on leave of absence. The company has separately retained Wilson Sonsini Goodrich & Rosati for legal counsel.

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