Tesla Takeover of SolarCity Not a ‘No-Brainer’ for All Investors

Elon Musk called the proposed marriage of Tesla Motors Inc. and SolarCity Corp. a “no brainer,” saying his $2.86 billion plan to combine the companies would benefit both.  Tesla investors didn’t seem so sure. While SolarCity shares rose 16 percent Wednesday in trading before U.S. exchanges opened, Tesla fell 10 percent. Oppenheimer & Co. analysts including Colin Rusch downgraded Tesla to perform from outperform in a research note published late Tuesday, saying they expect “a robust shareholder fight over this acquisition centered on corporate governance.” “We believe investors are likely to view this transaction as a bailout for SCTY and a distraction to Tesla’s own production hurdles,” said Rusch in the note. Credit Suisse Group AG analysts including Patrick Jobin said in a separate note that they expect “resistance from Tesla shareholders” and warned of “many corporate governance challenges.”

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