Musk says Saudi fund may support bid to take Tesla private

Tycoon says Saudi Arabian sovereign wealth fund has approached him multiple times

Elon Musk last week shocked investors with his announcement on Twitter to take Tesla private for $72 billion.

Elon Musk last week shocked investors with his announcement on Twitter to take Tesla private for $72 billion.

 

Tesla chief executive Elon Musk said the Saudi Arabian sovereign wealth fund has expressed support for funding a deal that could take the electric car maker private.

Musk last week shocked investors with his announcement on Twitter to take Tesla private for $72 billion (€63 billion), but provided no details on funding except that it was “secured”.

In a blog post on Monday he said that after a board meeting, “it was agreed that as a next step, I would reach out to some of Tesla’s largest shareholders.

“Our largest investors have been extremely supportive of Tesla over the years, and understanding whether they had the ability and desire to remain as shareholders in a private Tesla is of critical importance to me,” he said.

“They are the ones who believed in Tesla when no one else did and they are the ones who most believe in our future. I told the board that I would report back after I had these discussions.”

“To be clear, when I made the public announcement, just as with this blog post and all other discussions I have had on this topic, I am speaking for myself as a potential bidder for Tesla.”

Wealth fund

He said Tesla had been approached by Saudi Arabia’s sovereign wealth fund multiple times over the past two years about taking Tesla private.

“They first met with me at the beginning of 2017 to express this interest because of the important need to diversify away from oil.

“They then held several additional meetings with me over the next year to reiterate this interest and to try to move forward with a ‘going-private’ transaction. Obviously, the Saudi sovereign fund has more than enough capital needed to execute on such a transaction.”

“I left the July 31st meeting with no question that a deal with the Saudi sovereign fund could be closed, and that it was just a matter of getting the process moving. This is why I referred to ‘funding secured’ in the August 7th announcement.”

He dismissed reports that more than $70 billion would be needed to take Tesla private, saying they “dramatically overstate the actual capital raise needed”.

“The $420 buyout price would only be used for Tesla shareholders who do not remain with our company if it is private. My best estimate right now is that approximately two-thirds of shares owned by all current investors would roll over into a private Tesla.