Tesla may be step closer to going private
CEO says Saudi Arabia has offered financing.
Tesla CEO Elon Musk said Saudi Arabia’s investment fund has offered to finance his bid to turn the electric-vehicle maker into a private company.
Musk disclosed Monday that he has held discussions with Saudi Arabia’s sovereign wealth fund over the past nearly two years about the possibility.
And he wrote he has “no question that a deal with the Saudi sovereign fund could be closed.”
Musk’s disclosure followed questions about his Aug. 7 tweet that he was “considering taking Tesla private” with “funding secured” for a deal at a share price of $420.
The development surprised Wall Street in part because Musk delivered the news in a series of tweets while Tesla’s stock was still being traded – an atypical move for a publicly traded company that’s subject to scrutiny from the Securities and Exchange Commission. The SEC has reportedly made inquiries into the matter since then.
Musk’s clarification on his “funding secured” statement came in the form of a blog posted to Tesla’s official website before trading began for the day Monday. He said the managing director of Saudi Arabia’s sovereign wealth fund has “expressed support for proceeding subject to” standard due diligence and related approval processes. But he also emphasized that he is having similar discussions with “a number of other investors” because “I would like for Tesla to continue to have a broad investor base.”
The Saudi fund has acquired nearly 5 percent of Tesla by accumulating shares on the open market. That stake would be worth more than $3 billion today.
The Saudis have prioritized diversifying their economy amid concerns that their tight ties to oil could eventually jeopardize the country’s riches and political stability.
Any move for Tesla to go private would have to be authorized by the Palo Alto, California-based company’s board and a majority of its shareholders. The board has formed an independent committee to evaluate the possibility of going private.
Tesla’s stock closed up 0.26 percent to $356.41 on Monday.