Monday was one heck of a day for Elon Musk and Tesla Motors Inc (NASDAQ:TSLA), which was down as much as 3% before pulling up and finishing the day with a gain of 4%
That movement made it one of the few companies to withstand the pain caused by “Brexit.” But SolarCity Corp (NASDAQ:SCTY) has posted even stronger gains lately on the strength of Tesla’s bid to buy the company
TSLA Proposal Causing SCTY Board Issues
Because of the convoluted nature of the deal, two additional board members recused themselves from Tesla’s offer Monday.
On Monday evening, SolarCity’s board appointed a special committee of two people to evaluate Tesla’s proposal — Donald Kendall Jr. and Nancy Pfund. Kendall serves as the CEO of Kenmont Solutions Capital, and isn’t directly connected to Tesla. Pfund, founder and managing partner at DBL Investors, has previously served on Tesla’s board prior to its initial public offering.
All this leaves John Fischer, a Tesla partner and SolarCity investor, as the only board member not to recuse himself but who also is not on the special committee.
The committee is also bringing in Skadden, Arps, Slate, Meagher & Flom LLP for legal counsel and Lazard Ltd. as a financial advisor assisting in the review process.
The two-person special committee, along with outside advisors, will evaluate Tesla’s bid to purchase SCTY for up to $2.8 billion.
In the press release from SolarCity, the special committee is described as having “exclusive authority to evaluate SolarCity’s long-term business plan and stand-alone opportunities for value creation against a broad range of strategic alternatives.”
The deal hasn’t been without its detractors, with many citing the litany of conflicts that could arise from such close ties.
The stock price of SCTY stock is soaring more than 4% Tuesday morning, while the Tesla stock price immediately popped 2%, but is now sitting around a 1% gain.
As of this writing, John Kilhefner did not hold a position in any of the aforementioned securities.
