Tesla Motors Inc. (IW 500/227) is offering to buy SolarCity Corp., another company controlled by Elon Musk, who is chief executive officer of the electric-car maker and chairman of the solar company.
Musk, the largest shareholder of both companies, said he and Antonio Gracias, who is also a member of both boards, will recuse themselves from voting on the takeover offer. The all-stock deal is worth $26.50 to $28.50, or a premium of 21% to 30% from Tuesday’s closing price, Tesla said.
Tesla announced on its website the offer for SolarCity, the biggest U.S. installer of rooftop solar systems. Musk owns 22% of SolarCity and 21% of Tesla, the youngest and smallest publicly held U.S. automaker.
“It’s now time to complete the picture,” Tesla said Tuesday in an e-mailed statement. “Tesla customers can drive clean cars and they can use our battery packs to help consume energy more efficiently, but they still need access to the most sustainable energy source that’s available: the sun.”
The move comes as Tesla prepares to launch the Model 3, its more affordable electric car, in late 2017, and complete construction of the world’s largest battery factory.
Tesla fell as much as 12% in extended trading while SolarCity rose as much as 29%.
By Dana Hull and Alex Sherman