WASHINGTON (dpa-AFX) - Elon Musk's Tesla Motors Inc. (TSLA) made an offer to buy his SolarCity Corp. (SCTY) for as much as $2.8 billion.
Tesla proposed an exchange ratio of 0.122x to 0.131x shares of Tesla common stock for each share of SolarCity common stock. This proposal represents a value of $26.50 to $28.50 per share, or a premium of approximately 21% to 30% over the closing price of SolarCity's shares, based on today's closing price of SolarCity's shares and the 5-day volume weighted average price of Tesla shares.
Tesla said it is prepared to make the consummation of a combination of companies subject to the approval of a majority of disinterested stockholders of both SolarCity and Tesla voting on the transaction. In addition, as a result of their overlapping directorships, Elon Musk and Antonio Gracias have recused themselves from voting on this proposal at the Tesla board meeting at which it was approved, and will recuse themselves from voting on this proposal at the SolarCity board as well.
TSLA closed Tuesday's regular trading at $219.61, down $0.09 or 0.04 percent. In the after-hours, the stock further dropped $26.86 or 12.23 percent.
SCTY closed Tuesday's regular trading at $21.19, down $0.69 or 3.15 percent. However, in the after-hours, the stock gained $3.12 or 14.72 percent.
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