Saudis spark talks in taking Tesla private
Elon Musk revealed that Saudi Arabia has long been interested in taking Tesla Inc. private, which gave the him the confidence last week to drop the bombshell that he was considering the blockbuster potential deal.
Saudi Arabia’s sovereign wealth fund first approached Musk in early 2017 about taking Tesla off the market, he wrote in a blog post Monday. He confirmed the Public Investment Fund recently bought an almost five-per-cent stake and is interested in helping take Tesla private, as Bloomberg News reported Sunday.
Musk described a meeting late last month in which a managing director for the fund expressed regret that such a deal hadn’t moved forward. “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,” Musk wrote, adding that this is why he tweeted on Tuesday that he had “funding secured” to take Tesla private at US$420 a share.
The blog post is the latest in what’s been a piecemeal approach by Musk, 47, to explaining how he intends to pull off taking his money-losing electric-car maker private at a more than US$70 billion market capitalization. The billionaire CEO made no public mention of the Saudi fund’s involvement until Monday. Tesla’s board released a statement last week that only vaguely addressed how the transaction would be funded.
Several investors have since sued Musk and Tesla, claiming the company’s share price was manipulated. The Securities and Exchange Commission is said to be intensifying its scrutiny of the company and its CEO after having started gathering general information about Tesla and Musk’s earlier public remarks about manufacturing goals and sales targets.
One of Tesla’s biggest critics, Vertical Group analyst Gordon Johnson, read Musk’s blog post as walking back his “funding secured” claim. He cited Musk’s statement Monday that the Saudi fund’s support for taking Tesla private was “subject to financial and other due diligence and their internal review process for obtaining approvals.”