Tesla Board Forms Special Committee to Evaluate Buyout Proposals

Tesla’s board of directors said Tuesday it formed a special committee to consider chief executive Elon Musk’s proposal to take the electric auto giant private.

A new press release from the company said the special committee “has the full power and authority of the board of directors to take any and all actions on behalf of the board of directors as it deems necessary to evaluate and negotiate a potential going private transaction and alternatives to any transaction proposed by Mr. Musk.”

It added that no transaction would be consummated without the approval of the special committee.

“No assurances can be given regarding the likelihood, terms and details of any proposal or potential going private transaction, that any proposal made by Mr. Musk…will be accepted by the special committee,” the statement said.

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

Buss served as the chief financial officer of solar panel installer SolarCity for two years before retiring in 2016. Tesla bought SolarCity that year. 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. Rice, the first African-American and second woman to join the company’s board, is chairman of Johnson Publishing, home to Ebony and Jet magazines.

Musk said on Monday he had held talks with Saudi Arabia’s sovereign wealth fund on a buyout that would take Tesla off the Nasdaq exchange – an extraordinary move for what is now the United States’ most valuable automaker, worth more than $60 billion USD.

Sovereign wealth funds are investment funds that are controlled by the government. They can invest globally in stocks, bonds, real estate and other areas.

The Tesla boss shocked shareholders and Wall Street last week when he tweeted that he was considering taking the firm private at $420 USD per share — vs. the current price of $355 USD — adding that funding was “secured.”