Published: Mon, August 13, 2018
Markets | By Josh Butler

Saudi Arabia eyes enlarged stake in Musk’s private Tesla

Saudi Arabia eyes enlarged stake in Musk’s private Tesla

Tesla Inc Chief Executive Officer Elon Musk said the Saudi Arabian sovereign wealth fund has expressed support for funding a deal that could take the electric auto maker private.

A few days after Elon Musk shocked Wall Street and investors by tweeting that he would take Tesla private at $420 a share, speculation is still high on who could invest in what could be the biggest-ever buyout deal.

Musk's email to Tesla employees posted on Tesla's website on the day of the tweet explained the rationale for the going-private plan, but Musk has yet to prove that the "funding secured" part of his tweet was true.

The Saudi investment fund approached Musk months ago to discuss acquiring a minority stake but was turned down as the company did not plan on issuing new shares at the time, a source close to the discussions told Bloomberg. The timeline begins on August 2, when Musk told the board that he wanted to take Tesla private.

August 13, 2018, 3:38 p.m. CEST Shortly after this post was published, Elon Musk posted a note on the Tesla website, confirming that Saudi Arabia is interested in financing Tesla going private.

Melania's Parents Now US Citizens Using Visa Opposed By Her Husband
Viktor Knavs was a auto salesman in the Slovenian town of Sevnica, while his wife Amalija worked at a textile factory. Michael Wildes, the couple's immigration lawyer, confirmed they took the oath of citizenship on Thursday.

Musk also wrote that the Saudis are interested in the company because they want to diversify away from oil. But Tesla shares were up only minimally in early trading, suggesting investors are yet to be convinced.

After meeting with the Saudi Public Investment Fund about their purchase of a 5% stake in Tesla, Musk said the delegation asked for another meeting, which took place on July 31. They are the ones who believed in Tesla when no one else did and they are the ones who most believe in our future.

In turn, the fund bought almost US$2 billion (NZ$3 billion) worth of Tesla shares on the market with the help of an investment bank, building up a stake just short of 5 per cent in the company. 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. "I understood from him that no other decision makers were needed and that they were eager to proceed", Musk wrote in the blog.

A Saudi sovereign wealth fund is in talks that could make it a significant investor in Tesla if it is taken private. While the entrepreneur owns 20 percent of Tesla, more than $60 billion would be needed to buy the business from public shareholders. I will now continue to talk with investors, and I have engaged advisors to investigate a range of potential structures and options. "The board has met several times over the last week and is taking the appropriate next steps to evaluate this", the directors said.

Like this: