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Tesla board forms special committee to review Musk's privatization proposal

Tesla Inc. said Aug. 14 that its board has formed a special committee to evaluate, negotiate and approve the going-private transaction proposed by CEO Elon Musk.

The three-member special committee consists of Tesla independent directors Brad Buss, Robyn Denholm and Linda Johnson Rice and will have "the full power and authority" on behalf of the board with regard to the potential going-private transaction and alternatives to any transaction Musk proposes, the board said in a statement.

The special committee has not yet received a formal proposal from Musk regarding the proposed transaction and has not yet decided on the advisability or feasibility of the deal.

Musk first tweeted Aug. 7 that he intended to take the electric-car maker private at $420 per share and added, "Funding secured." Musk then stated in an Aug. 13 blog post that he has been in discussions with the Saudi Arabian sovereign wealth fund, which owns about 5% of Tesla, to finance the potential privatization.

The board said it has retained Latham & Watkins LLP and Wilson Sonsini Goodrich & Rosati as its legal counsel in this matter, and it will retain an independent financial adviser to help review Musk's formal proposal when it is received.

Musk is working with private equity firm Silver Lake Partners and investment bank Goldman Sachs Group Inc., which are serving as financial advisers, and with Wachtell Lipton Rosen & Katz and Munger Tolles & Olson as legal advisers on the potential privatization transaction.

Tesla and Musk are facing a regulatory probe and lawsuits over the billionaire's take-private tweet.