The electric-car company announced its offer to buy roughly $2.8 billion in SolarCity stock last Tuesday. The deal is valued at between $26.50 and $28.50 a share, a 21 to 30 percent premium over SolarCity's s closing price last week, according to FactSet.
Both companies are controlled by billionaire Elon Musk, and the boards are intertwined: Five SolarCity board members either work at Tesla, are on the Tesla board, or are related to someone who is, according to Recode.
To avoid compliance issues, the SolarCity board is leaving the decision of whether or not the Tesla proposal benefits shareholders to two directors, who don't have direct connections to the car company. Donald Kendall and Nancy Pfund will make the call.
The majority of board announced they would sit out any decision-making on the deal earlier this week. Elon Musk, Musk's cousins Peter Rive and Lyndon Rive, Antonio Gracias, and JB Straubel will all stay on the sideline, according to Reuters.