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Musk says he expects shareholders to approve SolarCity merger by a two-thirds majority

Tesla Motors CEO Elon Musk expects the proposed merger between the electric vehicle maker and SolarCity to win shareholder approval by a wide margin.

Musk, in an interview with the Wall Street Journal, said he expects “a supermajority, a two-thirds majority” to vote in favor of the $2.8 billion merger proposal, easily surpassing the simple majority of shareholder votes needed to approve the deal.

Musk, the largest shareholder in both Tesla and SolarCity, has said he won’t vote his shares on the deal. He owns a more than 20 percent stake in each company.

Musk said he has been talking with Tesla’s biggest investors, including Fidelity Investments and other mutual funds, to drum up support for the deal, which initially was met with skepticism by some investors.

Musk said the response from the institutional investors has been largely positive.

“The most informed investors are highly supportive of the transaction,” Musk told the Journal.

Musk has “yet to talk to an investor after I have fully explained the situation and not had them support it,” he said in the interview. “Most just didn’t understand how bringing together a car and a solar company made sense from a product standpoint.”

Tesla released its proposal to buy SolarCity on June 21, offering a 30 percent premium from the solar energy systems installer’s share price at the time.

Based on Tesla’s closing share price of $225.26 on Tuesday, its offer to buy SolarCity would pay $27.48 to $29.51 for each share of the solar energy systems installer’s stock. SolarCity stock closed at $26.26 on Tuesday.

SolarCity plans to open the biggest solar panel factory in the Western Hemisphere in Buffalo next year. The $900 million factory is being built by the state, using $750 million in funding through the Buffalo Billion economic development initiative.

email: drobinson@buffnews.com

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