Tesla Makes an Incestuous Bid to Acquire Solarcity

This is the brand of inter-breeding that is loathsome to Wall Street. Solarcity is a proxy company for Jim Chanos’ archenemy, Elon Musk. The stock has been pummeled to pieces for good reason. Chanos said, earlier in the year, that SCTY would face liquidity issues and made some dire predictions for the stock. Seeing his investment in SCTY wither away into peanuts, Elon Musk convinced his board to step in and acquire the piece of shit for $28.50.

This is poor corporate governance on the part of Tesla, diluting their brand of electric cars and batteries with solar panel horseshit.

“We seek to accelerate the world’s transition to sustainable transportation by offering increasingly affordable electric vehicles. And in March 2015, we launched Tesla Energy, which through the Powerwall and Powerpack allow homeowners, business owners and utilities to benefit from renewable energy storage. It’s now time to complete the picture. 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 SolarCity team has built its company into the clear solar industry leader in the residential, commercial and industrial markets, with significant scale and growing customer penetration. They have made it easy for customers to switch to clean energy while still providing the best customer experience. We’ve seen this all firsthand through our partnership with SolarCity on a variety of use cases, including those where SolarCity uses Tesla battery packs as part of its solar projects. So, we’re excited to announce that Tesla today has made an offer to acquire SolarCity.”

Tesla submits to SolarCity board of directors a proposal to acquire all of the outstanding shares of common stock of SolarCity in exchange for Tesla common shares. Subject to completing due diligence, co proposes 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 ~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. “We believe that our proposal offers fair and compelling value for SolarCity and its stockholders, while also giving SolarCity’s stockholders the opportunity to receive Tesla common stock at a premium exchange ratio and the opportunity to participate in the success of the combined company through their ongoing ownership of Tesla stock.”

In light of Elon Musk’s SEC disclosure obligations in his individual capacity as a stockholder of SolarCity this proposal will be publicly disclosed, but Tesla’s intention is to proceed only on a friendly basis.

On June 20, 2016, Tesla Motors delivered a proposal to the Board of Directors of SolarCity outlining a potential acquisition of SolarCity by Tesla Motors. Subject to completing due diligence and other customary conditions, Tesla Motors has proposed to acquire SolarCity for an exchange ratio of 0.122x to 0.131x for each outstanding share of SolarCity common stock.

The Company intends to carefully evaluate the proposal.

On June 21, 2016, Lyndon Rive, co-founder and Chief Executive Officer of SolarCity, sent a message to SolarCity’s employees discussing the proposal. “I wanted to let everyone know that Tesla has made an offer to acquire SolarCity. I’m really excited about this. There are tremendous synergies between these two companies; Tesla detailed some of them today in this blog post… You should know that the board and the shareholders will be considering this, and so while I am personally excited, I will be recusing myself from the decision-making process. Ultimately, the shareholders will decide. I know you will have questions about Tesla’s offer, and we’ll try to answer them as best we can, as soon as we can, but there is not a lot we can say right now. In the meantime, it’s important we remain focused on continuing to make progress toward our company goals. Our mission to advance the adoption of renewable energy remains as important as ever. There will be a lot of outside interest in Tesla’s offer, and it’s very important that we do not discuss this with anyone outside of the company, or mention it on social media or any other public forums.”

SCTY is higher by 15% to $24.5 in after-hours, well below the purported deal price, as this is an all stock deal. Shares of TSLA are being crucified, off by $25, or 11%.