Tesla looking to go private with backing of Saudi fund

Elon Musk.—Reuters file

Musk said that the Saudi Arabian sovereign wealth fund "has approached me multiple times" starting in early 2017 about taking Tesla private and had already taken a stake of almost five percent though share purchases.

He later tweeted he was working with buyout firm Silver Lake and investment bank Goldman Sachs Group Inc as financial advisers on his plan.

Three people familiar with the Saudi fund disputed Musk's claims to the New York Times, saying the fund hasn't made any of the moves that would be necessary for such a big deal including preparing a term sheet or tapping financial advisors.

Musk announced last week on Twitter and on Tesla's website that he was considering taking automaker Tesla private and had secured the funding to do so.

"I continue to have discussions with the Saudi fund, and I also am having discussions with a number of other investors, which is something that I always planned to do since I would like for Tesla to continue to have a broad investor base", Musk wrote.

Musk then proposed taking the company private at $420 a share - versus the current $354 - and said funding had been "secured".

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FILE PHOTO: A Tesla sales and service center is shown in Costa Mesa, California, U.S., June 28, 2018.

Since going public on Twitter, Musk said he has "continued to communicate with the managing director of the Saudi fund", and that "he has expressed support for proceeding subject to financial and other due diligence and their internal review process for obtaining approvals".

Saudi Arabia's Public Investment Fund (PIF) manages more than $230 billion in assets, but about 65 percent of that is stakes in large Saudi companies and most of the rest has been committed in overseas deals such as funding commitments to Blackstone Group LP's US infrastructure fund or SoftBank Group Corp's Vision Fund.

PIF officials have said in the past that decisions at the sovereign wealth fund are made with care, emphasizing corporate governance.

That's led to at least two class-action lawsuits alleging securities violations.

Mashable Tech Editor Pete Pachal on the fallout from Tesla CEO Elon Musk's tweet about potentially taking the company private. Continuing, it said there is no guarantee it would accept a proposal from Musk.

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