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Tesla Offers $2.8 Billion for SolarCity in 'No Brainer' Deal for Musk - ASHARQ AL-AWSAT English Archive
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Elon Musk sought to build a clean energy powerhouse as his electric car maker, Tesla Motors Inc, made an offer to buy his solar installation firm SolarCity Corp (SCTY.O) in a stock deal worth as much as $2.8 billion.

Tesla shares rushed more than 13 percent to $189.99 in extended trading – amounting to a loss in value of about $4.3 billion, or more than the value of the offer for the other company. Shares of SolarCity rose about 18 percent to $25.02.

Musk described the deal as a “no brainer” adding that the company could sell customers an electric car, a home battery and a solar system all at once, he said.

“Instead of making three trips to a house to put in a car charger and solar panels and battery pack, you can integrate that into a single visit,” Musk told reporters. “It’s an obvious thing to do.”

“Ideally you want to see Tesla focus on Tesla – building Teslas and expanding the cars,” said Ivan Feinseth, an analyst at Tigress Financial Partners. “Maybe the feeling is that this takes away focus, and it could financially strain Tesla, which is going to continually need a lot of cash.”

Tesla did not know how many of its customers have solar panels, according to Musk, who guessed that most of them were likely interested in solar.

The solar systems will be sold under the premium Tesla brand, which is looking forward to make growth in regards of its target market with a $35,000 electric vehicle called the Model 3 that it will begin delivering late next year.

Tesla said it offered $26.50 to $28.50 per share for SolarCity, which represents a premium of about 25 percent to 35 percent to the company’s Tuesday close of $21.19. That values the deal at about $2.6 billion to $2.8 billion overall.

In a statement issued late Tuesday, Tesla said its management will host a conference call to discuss the ‘rationale’ surrounding the offer to buy SolarCity. The conference call is scheduled to take place Wednesday morning before U.S. markets open.

Asharq Al-Awsat English

Asharq Al-Awsat English

Asharq Al-Awsat is the world’s premier pan-Arab daily newspaper, printed simultaneously each day on four continents in 14 cities. Launched in London in 1978, Asharq Al-Awsat has established itself as the decisive publication on pan-Arab and international affairs, offering its readers in-depth analysis and exclusive editorials, as well as the most comprehensive coverage of the entire Arab world.

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