After just over a month of due diligence and negotiations, Tesla (TSLA) and SolarCity (SCTY) are reportedly about to announce a merger agreement, likely on Monday. Interestingly, the agreement is reportedly likely to include a ‘go-shop’ provision to allow SolarCity to request offers from other potential buyers before bringing the offer to a shareholders vote.
The news of an agreement comes from “people familiar with the matter” talking to Reuters on Sunday.
Last week, a similar report came out suggesting that a deal could be announced in the “coming days.”
After speaking with major Tesla and SolarCity shareholders, Elon Musk recently said that he is confident an agreement would be adopted by around two-thirds of the shareholders. Although he gave his support of the offer and made a potential tie-up between the companies an important part of his “Master Plan“, he himself recused from voting his shares worth about 22% of each company.
The original offer announced by Tesla last month was a ~$2.8 billion deal to acquire SolarCity in an all-stock transaction that would see SCTY shares convert to TSLA shares at a ratio of 0.122 to 0.131. It’s not clear if the offer has changed, but a ‘go-shop’ provision could potentially increase the price. We will likely know more on Monday.
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