Tesla looking to go private with backing of Saudi fund

Marco Green
August 14, 2018

On August 7, Musk surprised the investment world with a Twitter announcement that he was considering taking Tesla private and that the funds needed to do so - which some financial analysts estimate at more than $70 billion - were "secured".

Tesla Chief Executive Elon Musk tweeted yesterday that he was working with buyout firm Silver Lake and investment bank Goldman Sachs Group as financial advisers on his plan to take the U.S. electric auto maker private.

In July 31 meeting with the fund's managing director, Musk said the investors seemed eager and willing to move forward with a plan to take Tesla private.

Elon Musk's decision to tweet that he was considering taking Tesla private reportedly caught some of the company's own board directors off guard, The New York Times reported on Monday. Musk wrote that he tweeted the plan August 7 after "it was clear to me that the right thing to do was announce my intentions publicly".

"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", he said.

Musk's tweet caused a financial firestorm with Tesla shares immediately skyrocketing by nearly 11 per cent, although in the coming days they lost a good part of what they had gained.

Musk shocked markets last week with the tweeted announcement that he was considering taking Tesla private for $420 a share.

Moreover, Silver Lake, which contributed $1.4 billion in equity to Michael Dell's deal in 2013 to take the eponymous U.S. computer maker private, is not now discussing participating in the potential Tesla deal as an investor, the source added.

In essence, what was initially considered to be a stupid weed joke has cost Musk the goodwill of Tesla fans (or at least those seeking to profit from his offer to go private at $US420 [$577]), deepened his already contentious relationship with short sellers, led to an SEC investigation, and could potentially cost him losses in court.

This story will be updated.

Other reports by Click Lancashire

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