Analyst: Tesla-SolarCity Deal Would Likely Come At A Higher Level

SolarCity Corp SCTY spiked 20 percent while Tesla Motors Inc TSLA sold off in Tuesday's after-hours session after the carmarker made a bid for the solar company that represents a value of $26.50 to $28.50 per share.

"It's clearly not a 'done deal,'" Raymond James analyst Pavel Molchanov told Benzinga, "but rather just an offer for now. I think there is room for a deal, but likely at a higher level."

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On whether or not this presents any conflict of interest for Elon Musk, Molchanov said he "is recusing himself, so the negotiations will not involve him directly. That eliminates the conflict of interest."

Elon Musk co-founded SolarCity in 2006 and is its largest shareholder. For Tesla, he led the Series A round of investment in February 2004, joining Tesla's board of directors as its chairman. He become CEO in 2008.

"Tesla clearly aims to become a broad-based player in clean tech, not just electric vehicles," Molchanov concluded.