Elon Musk has offered Solar City a .8 billion purchase proposal in a stock deal that would unite the company with Tesla Motors.
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Shares in Tesla tanked more than 13 per cent to $189.99 in extended trading, wiping around $4.3bn off of its market value.
Musk, who owns 19 percent of Tesla and 22 percent of SolarCity, said when the deal was declared on Tuesday that it would open up opportunities for Tesla to sell customers an electric auto, a home battery and a solar system all at once.
Solarcity is an American company responsible for designing, making and supplying solar power systems for houses and business, and Tesla believes its technology is well suited to supplying energy to its electric cars.
The energy services provider, on the other hand, provides solar panels to Tesla’s car-charging stations.
“My personal opinion is that obviously this is something that should happen, like it’s a no-brainer”, he said in a conference call on Tuesday evening.
Electric carmaker Tesla Motors confirmed Wednesday it was hoping to acquire solar panel producer SolarCity for up to $2.8 billion (2.5 billion euros). Musk, as well as Antonio Gracias, who is a board member at both companies, have recused themselves from voting on the matter at both companies.
Musk said his vision about Tesla was that of a major in sustainable energy than a mere automotive company.
Under the all-stock deal, Tesla offered SolarCity between $26.50 and $28.50 a share, depending on a volume-weighted five-day average price of Tesla shares.
Though most of the webcast did not reveal more detail than what was already announced, there were a few tidbits around the Tesla-SolarCity deal that we thought was worth resurfacing. Based on the current outstanding share count, the stock would be valued at ~$6,843 per share versus the last closing price of $219.
“It’s now time to complete the picture”, Tesla said Tuesday in an e-mail.
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“Homes spend up to $20,000 a year between transportation and energy and that’s just a large amount of spend for one company to go after”, said Morosi.
