Published: Mon, August 13, 2018
Business | By Pearl Harrison

Elon Musk in talks with Saudi fund to take Tesla private

Elon Musk in talks with Saudi fund to take Tesla private

Saudi Arabia's Public Investment Fund (PIF) has shown no interest so far in financing Tesla Inc CEO Elon Musk's proposed $72 billion deal to take the USA electric auto maker private, despite acquiring a minority stake in the company this year, two sources familiar with the matter said. According to the blog, the fund first met with Musk in early 2017 to discuss going private again, and the two parties met multiple times thereafter.

Musk in his blog elucidated his reasons of making a public announcement.

Tesla Inc. Chief Executive Officer Elon Musk and advisers are seeking a wide pool of investors to back a potential take-private of the automaker to avoid concentrating ownership among a few new large holders, according to people familiar with the matter. The comprehensive plan, known as Vision 2030, was laid out in April by the country's leaders and involves transferring 5 percent of state-owned Saudi Aramco to the investment fund through an initial public offering, expected to be the largest in history.

Saudi Arabia's Public Investment Fund (PIF), the country's sovereign wealth fund, is in talks with Tesla about becoming a significant investor as part of the move towards privatisation, sources with knowledge of the fund's plans told Bloomberg on Sunday. Musk and SoftBank Group's Masayoshi Son held talks previous year that touched on taking Tesla private, two people with knowledge of the talks have said. Musk said. "This is why I referred to "funding secured" in the August 7th announcement". Once those discussions are complete, Musk will bring a proposal to Tesla's board.

Tesla shares "jumped 11 percent" following Musk's tweets predicting privatization of the company, leading to lawsuits filed by investors and a Securities Exchange Commission (SEC) investigation.

He added that most capital for the deal would come from equity and it would not be "wise" to burden the company with added debt. Musk says he expects that one third of shareholders would sell.

Tesla shares were down a fraction of a percentage point in late-morning trading, and they had lost about 6 percent of their value since shooting up Tuesday following Musk's Twitter bombshell. People close to at least 16 financial institutions and technology firms, who spoke on the condition of anonymity, have said they weren't aware of financing having been locked in before Musk's tweet. "So the potential investor must be patient and strategic-looking".

"If the board process results in an approved plan, any required regulatory approvals will need to be obtained and the plan will be presented to Tesla shareholders for a vote".

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