In today’s weird transportation news, Elon Musk’s car company just offered to buy Elon Musk’s solar energy company.
Elon Musk and his family could stand to gain $700 million in Tesla shares from SolarCity deal
Musk and his cousins own a good chunk of SolarCity.
Asa Mathat
The deal has yet to be approved by shareholders, but Tesla’s board of directors has offered to swap SolarCity’s remaining stock for Tesla’s stock at $26.50 to $28.50 a share.
The total stock-for-stock deal amounts to about $2.8 billion, based on where Tesla stock was trading before the proposal was announced.
According to Musk, it’s a “no-brainer.” That’s because it’ll bring his two companies closer to achieving their goal of accelerating the transition to using sustainable and renewable energy to fuel everything we do.
Think: A one-stop-shop for your electric-powered car, the solar-powered battery that helps you charge the car and the solar-powered battery pack that will help you power your entire house.
But the deal might also be “blindingly obvious,” as Musk said, because Musk and his family stand to make a good chunk of change from the transaction.
Musk, who is the CEO of Tesla and chairman of SolarCity, personally owns 22 percent of SolarCity’s, or 22.2 million shares. So if the acquisition goes through, Musk would personally reap around $587 million to $632 million worth of Tesla shares.
Correction: An earlier version of this story suggested that Musk and his family members would “take home” $700 million in this deal. As Musk writes, that’s not the case:
To be clear, the entrepreneur won’t be cashing a check from the acquisition, but he does stand to gain by owning more shares of Tesla. That also goes for anyone in his family who owns SolarCity shares.
Musk’s cousins Lyndon Rive (SolarCity CEO) and Peter Rive (SolarCity CTO) each own about 2.3 million shares, according to the company’s investor relations site. That would represent about $65 million each in Tesla shares.
At the low end, this brings the Musk family’s total holdings from this deal to more than $700 million. At the high end, more than $750 million.
Because of this conflict of interest, Musk recused himself from voting on the deal at Tesla’s board meeting, and will do the same when SolarCity’s board votes.
This article originally appeared on Recode.net.
