Tesla forms special committee to consider going private

In a prepared statement Tuesday, Tesla said that "no assurances can be given regarding the likelihood, terms and details of any proposal or potential" to go private.

Musk disclosed on Monday that he had been in talks with Saudi Arabia's sovereign wealth fund and other potential investors on a plan that would delist Tesla from the stock market. He said the board's outside directors discussed going private without Musk or his brother Kimbal Musk, a board member, present. Private equity firm Silver Lake is also not signed up officially as a financial adviser, as it is helping Musk explore how to take Tesla private with no compensation, Reuters reported on Monday.

The first such suit was filed Friday by Tesla short seller Kalman Isaacs, who contended that the tweets were exclusively meant to manipulate the company's stock price - a move that's estimated to have cost Isaacs and those making similar bets upwards of $US1 billion ($1.4 billion).

According to Musk, the Saudi sovereign fund expressed its interest in order to diversify from oil and "has more than enough capital needed to execute on such a transaction".

Musk's effort to associate his potential bid with some of Wall Street's most venerable institutions, even at the risk of misrepresenting their involvement, comes as pressure has been building on him to justify his pronouncement last week that funding for a deal had been "secured".

Musk on Monday estimated two-thirds of existing Tesla shareholders would roll over their holdings into a private company, but said that he was still talking with major shareholders and advisers before settling on a structure for the deal.

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He said that since his Twitter posts on the possibility of a deal the managing director of the Saudi fund had expressed support for proceeding subject to financial and other due diligence.

Goldman Sachs declined to comment.

Tesla said the committee consists only of independent directors: Brad Buss, Robyn Denholm and Linda Johnson Rice. Denholm is the chief operating officer of Telstra, a telecommunications company.

Then on Tuesday, the Tesla board said it wasn't clear yet that going private made sense.

On 7 August, Musk surprised the investment world with a Twitter announcement that he was considering taking Tesla private and that the funds needed to do so - which some financial analysts estimate at more than $70 billion - were "secured". The company has separately retained Wilson Sonsini Goodrich & Rosati for legal counsel.

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