Saudi fund in talks for possible deal to take Tesla private

Discussions started before Musk’s controversial tweet which rattled markets

Saudi Arabia’s sovereign wealth fund is in talks that could see it possibly becoming a significant investor in Tesla as part of Elon Musk’s plan to take the electric car maker private, according to a person with direct knowledge of the fund’s plans.

The Public Investment Fund, which has built up a stake just shy of 5 per cent in Tesla in recent months, is exploring how it can be involved in the potential deal, the person told Bloomberg. Discussions began before the controversial August 7 tweet by Musk, who is Tesla’s cofounder and chief executive officer, saying he was weighing a plan to take the company private.The PIF sees its investment in Tesla as a strategic way for the world’s biggest crude producer to hedge against oil, the person said.

The Saudi fund hasn’t made any firm decisions on whether to increase its stake, or by how much, but talks are ongoing, the person said.

Even as investors and analysts viewed PIF as a natural financing partner for Tesla, the sovereign wealth fund has poured tens of billions of dollars into technology investments, including $45 billion in SoftBank Group Corp’s Vision Fund over five years.

A source familiar with PIF’s strategy told Reuters that the Saudi fund would not make an investment of this kind without seeking guidance first from SoftBank.

The Tesla board will make a decision on whether to hire advisers and launch a formal review of Musk’s take-private proposal in the coming days.