Tesla looking to go private with backing of Saudi fund

Tesla looking to go private with backing of Saudi fund

The Saudi fund over almost two years had approached him repeatedly about taking the company private, Musk said, and the latest meeting came after it took a almost 5 percent stake in Tesla.

He has given more details - including saying he is working with Goldman Sachs and buyout firm Silver Lake - but is yet to convince Wall Street analysts and investors that he can find the billions needed to complete the deal.

On August 2, Musk notified the Tesla board about his intention to take Tesla private at US$420 per share - a 20% premium.

Shares in Tesla inched down 0.2 percent in early trading and have now fallen more than 8 percent from highs hit following Musk's tweet last week.

At about the same time he tweeted this, reports of the Saudi Arabian sovereign wealth fund taking an interest in the company, beyond just buying shares on the stock market, surfaced.

FILE PHOTO: A Tesla sales and service center is shown in Costa Mesa, California, U.S., June 28, 2018.

Saudi Arabia's Public Investment Fund (PIF) is known for its technology investments, including the $45bn it has spent in SoftBank Group Corp's Vision Fund.


The Saudi fund intends to sell its $70 billion stake in Saudi Basic Industries to oil giant Aramco, which could free up funds for new deals, but that sale may take months to conclude.

PIF officials have said in the past that decisions at the sovereign wealth fund are made with care, emphasising corporate governance. Musk says he has stayed in contact with the Saudi fund and has been reaching out to other investors ever since.

It remains unclear if his definition of "secured" matches those of a reasonable shareholder, who may believe the statement indicated Musk had a written agreement, they said.

"'Funding secured' wasn't exactly funding secured", said Peter Henning, a law professor at Wayne State University in Detroit, a former SEC lawyer.

While Musk used Monday's blog post as a way to show the tweets were part of an effort to be completely transparent with shareholders about wanting Tesla to be a private company, sources told the paper it was impulsive and was driven by feelings of anger for the vehicle maker's critics.

That's led to at least two class-action lawsuits alleging securities violations.

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