SolarCity (NASDAQ:SCTY) formed a special committee of independent directors to evaluate the proposal of Tesla Motors (NASDAQ:TSLA) to acquire all of its outstanding common stock.
The special committee is composed of Donald R. Kendall, Jr. and Nancy E. Pfund. Mr. Kendall will serve as chairman of the special committee, which has retained the services of Skadden, Arps, Slate, Meagher & Flom LLP as its legal counsel and Lazard as its financial advisor, help in the evaluation of Tesla’s offer.
According to SolarCity, its Board provided the special committee with an exclusive authority to review the company’s long-term business plan and stand-alone opportunities for value creation compared to a variety of strategic alternatives.
Tesla’s offer to SolarCity
Last week, Tesla offered to acquire SolarCity for $26.59 to $28.50 per share or about $2.8 billion in total value. The electric manufacturer believed that its offer is fair and compelling for the solar energy company and its shareholders.
Tesla said the deal will create the “world’s only vertically integrated energy company offering end-to-end clean energy products.”
The electric car manufacturer believed that a merger will allow both companies to build and maximize its respective core competencies and will continue to lead in delivering innovative solutions for sustainable energy and transportation.
SolarCity Board members recuse from voting on the deal
Tesla Chairman and CEO Elon Musk, who also serves as Chairman of SolarCity recused himself from voting on the proposal. He co-founded both companies. He owns 19% stake in the electric car manufacturers and 22% stake in the solar energy company.
Antonio Gracias, the founder and CEO of Valor Equity Partners, who also serves on the Boards of Tesla and SolarCity, recuses himself from voting on the deal.
SolarCity co-founder Lyndon Rive also recused himself. His brother, Peter Rive, who is also a co-founder of the solar energy company and serves as its CTO also decided not to participate in the decision process.
JB Straubel, co-founder of Tesla and a member of the Board of SolarCity also recused himself from voting on the deal.
The solar energy company’s spokesman Jonathan Bass said “We’re very mindful of the need to have a process that ensures independent, objective decisions that are in the best interest of all shareholders.”