Musk says talking to Saudi fund, others on Tesla buyout

Musk says talking to Saudi fund, others on Tesla buyout

Musk says talking to Saudi fund, others on Tesla buyout

Musk took to Twitter last week, as he does, to propose a $72 billion deal to take Tesla private, arguing it would help the company focus more on long-term goals than hitting quarterly results and would shield it from short-sellers.

The tycoon said he left a meeting with wealth fund officials on July 31 with no question that the deal could be closed - which is why he tweeted on August 7 that funding had been "secured".

"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.

In his blog Monday, Musk said that reports that more than US$70 billion would be needed to take Tesla private "dramatically overstate the actual capital raise needed" because he expected some shareholders to remain invested in the firm.

The wealth fund recently bought almost five per cent of Tesla's shares.

On the day following the tweet, Tesla's Board of Directors members Brad Buss, Robyn Denholm, Ira Ehrenpreis, Antonio Gracias, Linda Johnson Rice, and James Murdoch said that Elon Musk had opened a discussion with the board in the previous week about taking the company private.

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In late July, the Saudis purchased nearly five percent of Tesla's stock (acquiring more than five percent would have triggered public disclosure requirements). Musk and SoftBank Group's Masayoshi Son held talks a year ago that touched on taking Tesla private, two people with knowledge of the talks have said. The Securities and Exchange Commission is investigating Musk's disclosure of the potential deal, according to reports earlier this week. CEO Elon Musk's audacious plan to take the carmaker private is distracting dealmakers from a normally quiet August spent in the Hamptons or Southern France.

A total buyout of Tesla would cost more than $70 billion.

The Public Investment Fund didn't respond to requests for comment, and Tesla declined to comment. PIF explores ways on how it could be involved in the possible going-private deal, for which Musk prefers to have a larger group of investors instead of just one or two large stakeholders, Bloomberg's sources say.

It is understood Saudi Arabia views an investment in Tesla as a strategic hedge against the oil price. The discussions failed to progress due to disagreements over ownership.

The current talks about the PIF potentially participating in a take-private transaction started in recent weeks, the other people said. In a tweet on Sunday, the nation's Energy Department said Saudi Arabia now is working to develop a city to support the supply of raw materials and parts for the automobile industry.

-With assistance from Oliver Sachgau, Dinesh Nair, Zaid Sabah, Ed Hammond and Yan Zhang.

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