Tesla to acquire Solar City for $2.59 to $2.78 billion dollars

[Arsen258]

Source: https://techcrunch.com/2016/06/21/teslacity/

 

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The great Elon Musk empire is uniting. Today his electric car and battery company Tesla announced its offer to acquire his solar panel installation company SolarCity. Together the companies could allow you to outfit your home with solar panels that power a giant battery for everything inside, as well as your electric car.

The deal still has to be approved by SolarCity and its board. If it goes through, it would see SolarCity stock exchanged for Tesla stock. The deal would pay a premium of 21 percent to 30 percent on top of SolarCity’s value of $2.14 billion, so Tesla would be buying SolarCity for between $2.59 billion and $2.78 billion worth of its stock.

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Recently SolarCity had its value downgraded because it’s been bleeding hundreds of millions of dollars, making it an easier acquisition target. SolarCity’s share price skyrocketed 20 percent in after-hours trading as soon as the announcement hit. That means the premium on SolarCity’s value has been instantly cut much smaller in after-hours.

Musk will recuse from voting on the acquisition, as will Tesla and SolarCity board member Antonio Gracias. However, Tesla says it only wants to make the acquisition if it’s friendly, not a hostile take-over.

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Tesla’s share price dropped 13 percent in after-hours trading. That’s because some might consider this a bailout of SolarCity, with Musk rescuing his 22.2 percent stake in the company by acquiring it with Tesla. SolarCity’s share price was down from more than $50 in December to around $21 when today’s deal was announced. If it continued to sink, Musk could lose a ton of money. Tesla could build its own solar business or acquire SolarCity’s assets later if it kept sinking, but that would burn hundreds of millions of Musk’s own money first.

Am i the only one who thinks that it is in fact strange, that one guy owns both companies and one of them starts loosing its value hours before a purchase offer is published? Is that even legal in the US? I mean I know, he decided not to vote on that matter but still.

[Rune]

Nope. Completely legal.

[vanished]

Does your story include new information, or is it a repost?

 

[Arsen258]

Hmm i think it does. From what i see, the one before was just an simple offer posted on TESLA site and SEC. Mine is sort of an analysis and the description of some emm shady movements made by Musk. I must admit however. that i haven't see the previous article before i posted this one so if you think that it should not be posted separately then by all means remove it  

[vanished]

55 minutes ago, Arsen258 said:

Hmm i think it does. From what i see, the one before was just an simple offer posted on TESLA site and SEC. Mine is sort of an analysis and the description of some emm shady movements made by Musk. I must admit however. that i haven't see the previous article before i posted this one so if you think that it should not be posted separately then by all means remove it  

Well as far as I can tell they both talk about the offer being made to buy solar city.  If this had more recent news, like "deal goes through", etc. that would be what I consider "new" but it looks like the same content to me.