Two more SolarCity directors with ties to Tesla Motors and its CEO Elon Musk are recusing themselves from making decisions about the electric vehicle maker’s bid to acquire the solar energy systems installer.
Peter Rive, Musk’s cousin and the brother of SolarCity CEO Lyndon Rive, and JB Straubel, Tesla’s co-founder and chief technology officer, will recuse themselves from SolarCity’s decision-making process, the company said in a statement.
They join Musk, Lyndon Rive and Antonio Gracias, who sits on both the Tesla and SolarCity board, as directors who are removing themselves from the decision-making process over Tesla’s $2.8 billion merger bid.
With five directors on the sidelines, there are only three SolarCity directors who have not recused themselves: venture capitalists John Fisher and Nancy Pfund, along with money manager Donald Kendall Jr.
“Only board members who meet the requirements for independence will be involved in the decision-making process at SolarCity,” SolarCity spokesman Jonathan Bass said in a statement.
And two of those remaining SolarCity directors have ties to Tesla.
Fisher is a representative of Silicon Valley venture capital firm, Draper Fisher Jurvetson. Fisher’s partner, Stephen Jurvetson, sits on Tesla’s board.
Pfund, managing partner at venture capital firm DBL Investors, previously served on Tesla’s board and was an early investor in both Tesla and SolarCity.
That leaves Kendall as the only SolarCity board member without some sort of tie to Tesla.
Musk is the biggest shareholder in both companies, serving as SolarCity’s chairman.
SolarCity plans to form a special independent board committee to evaluate the merger proposal, Bass said. That committee will have its own independent counsel.
Musk last week described the merger between SolarCity and Tesla as a “no-brainer” that would create a sustainable energy juggernaut that can sell electric cars, solar energy and the batteries that both systems rely on.
But investors and analysts have greeted the merger proposal coolly, noting that it would unite two companies that are losing money and rely heavily on raising large sums of money from the financial markets.
SolarCity’s stock has risen just 2 percent since the deal was announced, with the shares trading for significantly less than the price of $23.69 to $25.44 pegged in Tesla’s ofer. Tesla’s shares have tumbled by 12 percent since the merger proposal was announced Tuesday evening. Because Tesla’s shares have dropped since the proposal was announced, the premium that SolarCity shareholders would receive from the deal has shrunk, as well.