While SolarCity shares rose as much as 29 percent in extended trading, Tesla fell as much as 14 percent, accounting for a loss in value of about 4.3 billion dollars. This represents a value of $26.50 to $28.50 per share, about 20% to 30% higher than SolarCity’s previous closing price. 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. The new company, whose products will be renamed Tesla, would sell electric cars, home batteries and solar system all at once.
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SolarCity is run by Musk’s first cousins, Lyndon and Peter Rive, and is the market leader in residential solar panel installations in the US.
“In light of Elon Musk’s SEC disclosure obligations in his individual capacity as a stockholder of SolarCity, this proposal will be publicly disclosed, but Tesla’s intention is to proceed only on a friendly basis”. But he’s also co-founder, chairman, and majority shareholder of SolarCity.
Rather than make three trips to install a auto charger, battery pack and solar panels it can be integrated into one visit making this deal an obvious thing that should be done. SolarCity still lists Honda as a partner on its website, though there’s no word whether that will change if they are purchased by Tesla.
“It’s now time to complete the picture”, Tesla said Tuesday in an e-mail.
That’s dependent on whether the boards of both companies approve the sale.
SolarCity’s stock has plunged about 63% over the past year as the solar industry battles increasing headwinds. There are suggestions, however, that Tesla is bailing out SolarCity, which according to Reuters has around $6.24 billion in liabilities, including debt.
So, we’re excited to announce that Tesla today has made an offer to acquire SolarCity.
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“The world does not lack for automotive companies – the world lacks for sustainable energy companies”, Musk observed.
