Elon Musk Looking to Dell Saga for Advice in Plan to Take Tesla Private
Elon Musk has a big plan to take Tesla private. On Tuesday, the CEO revealed his team of advisors that will be fleshing out the financial and legal issues being taking Tesla off the stock exchange, with a view to presenting a plan to the board’s team.
Musk will work with Goldman Sachs and Silver Lake as financial advisors, the latter of which helped Michael Dell take his namesake computer firm private in 2013 in a $24.4 billion deal. A source told Reuters that Silver Lake was working with Musk without compensation and has no plans to participate as an investor in the proposal. Silver Lake contributed $1 billion for the 2013 Dell transaction. Musk will also be using Wachtell, Lipton, Rosen & Katz and Munger, Tolles & Olson as legal advisors.
*See more: Tesla Going Private? The 3 People Who Will Decide Don’t Include Elon Musk
The news comes on the same day that Tesla’s board of directors have announced a special committee that will evaluate Musk’s proposal. The three-person team that will give the ultimate thumbs up consists of former SolarCity chief financial officer Brad Buss, former Sun Microsystems executive Robyn Denholm, and former MoneyGram board member Linda Johnson Rice.
Musk announced his plans to take Tesla private one week ago over Twitter, announcing that he would offer a price of $420 per share (which later turned out to not be a weed reference). His tweets angered some investors, who have already filed two lawsuits. Musk explained in a longer post that he felt confident in going public with his plans after a meeting with Saudi Arabia’s public investment fund, who own less than five percent of Tesla. The total buyout cost is unclear as investors will have the option of staying with a newly-private Tesla, but the proposed share price places a 20 percent premium on the $350 price on the day of the annoumcement. Musk expects two-thirds of shares to stay in Tesla.
It’s unclear whether Musk will be successful with his plan, but former proposals to merge with SolarCity and roll out a rewards package passed shareholder votes with large majorities, suggesting strong support for his leadership. The three-person team, however, states that it “has not yet received a formal proposal from Mr. Musk regarding any Going Private Transaction nor has it reached any conclusion as to the advisability or feasibility of such a transaction.”
Time will tell whether Tesla will follow in Dell’s footsteps.
