Economy, Auto

Musk Bid for Tesla Still Murky

Musk Bid for Tesla Still Murky Musk Bid for Tesla Still Murky

Tesla Inc’s board named a special committee of three directors on Tuesday to decide what to do about Chief Executive Elon Musk’s potential offer to take the electric carmaker private, although Musk has yet to make a formal offer and is still negotiating to hire advisers needed to do a deal.

The board announced the move in Tesla’s first filing with regulators since Musk tweeted a week ago that he was considering taking the company private and had already secured funding for a $420-per-share offer, valuing Tesla at $72 billion, Reuters reported.

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

Musk tweeted on Monday he was working with Goldman Sachs Group Inc and private equity firm Silver Lake as financial advisers. However, as of Tuesday, Goldman Sachs was still negotiating its terms of engagement with Musk, according to a person familiar with the matter.

Silver Lake was also not signed up officially as a financial adviser, as it is helping Musk explore how to take Tesla private with no compensation. Goldman Sachs and Silver Lake declined to comment.

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 that funding for a deal had been “secured”.

Musk said on Monday he had held talks with a Saudi sovereign 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. Tesla has a market value of $60 billion, bigger than Detroit rivals General Motors Co or Ford Motor Co, which produce far more cars.

Tesla shares closed down 2.5% at $347.64 on Tuesday. They are still above $341.99, their closing price the day before Musk tweeted his plan to take Tesla private, which pushed the shares up 11% to an 11-month high.

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