Tesla’s board of directors is taking Elon Musk’s offer to take the company private seriously and plans to meet with financial advisors next week to explore his proposal, reports say.
CNBC reported that the board will ask Musk to recuse himself from the talks, citing an anonymous source.
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The board has also told Musk that he needs his own separate set of advisors, the report suggested. It added that Tesla’s board will likely develop a special committee of a smaller number of independent directors to review the buyout details.
Tesla’s CEO announced earlier this week, via his Twitter account, that he’s considering taking the company private at USD420 per share and he said he has secured the funding necessary to do it.
The Financial Times newspaper also reported that the investment arm of Saudi Arabia has acquired a substantial stake – possibly as much as 5% – in Tesla.
In a letter to employees, Musk said that being a public company subjects Tesla to the quarterly earnings cycle that ‘puts enormous pressure on Tesla to make decisions that may be right for a given quarter, but not necessarily right for the long-term’.
He also said that ‘once Tesla enters a phase of slower, more predictable growth, it will likely make sense to return to the public markets’.
Musk owns 20 percent of the company, and that won’t change substantially if the deal goes through, he said.
Majority shareholder approval would be required for the plan to happen.
