Tesla CEO confirms Saudi interest in buyout plan

SAN FRANCISCO, Aug. 14 — U.S. top electric automaker Tesla CEO Elon Musk said Monday that he has held talks with Saudi Arabia’s sovereign wealth fund about his plan to take his company private.
Musk broke silence in a blog post Monday after several days of speculations on how he is going to privatize Tesla following his announcement on Twitter on Aug. 7 that he was considering taking Tesla private at a price of 420 U.S. dollars per share.
“Going back almost two years, the Saudi Arabian sovereign wealth fund has approached me multiple times about taking Tesla private. They first met with me at the beginning of 2017 to express this interest,” Musk said.
“Obviously, the Saudi sovereign fund has more than enough capital needed to execute on such a transaction,” he wrote.
He said the Saudi sovereign fund has recently purchased almost 5 percent of the Silicon Valley-based electric car maker’s stocks on the public markets, and that the fund’s managing director “strongly expressed his support for funding a going private transaction for Tesla at this time.”
No other decision makers were needed and they were eager to proceed, Musk said.
“I left the July 31st meeting with no question that a deal with the Saudi sovereign fund could be closed, and that it was just a matter of getting the process moving. This is why I referred to ‘funding secured’ in the August 7th announcement,” said the Tesla billionaire.
Apart from the Saudi sovereign fund, Musk said he is having talks with other potential investors about his privatization plan.
“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 noted.
He dismissed as “dramatically” overstating media reports that more than 70 billion dollars would be needed to make Tesla private.
He said the 420-dollar buyout price would only be used to pay shareholders who chose to leave the company if it goes private.
“My best estimate right now is that approximately two-thirds of shares owned by all current investors would roll over into a private Tesla,” he said. Analysts estimated that the buyout could cost about 20 billion to 30 billion dollars in cash.
The Wall Street Journal reported last week that the U.S. Securities and Exchange Commission was investigating the announcement Musk disclosed on Twitter, in a bid to see whether his statements were misleading. The reports said Musk could be subject to lawsuits brought against him by investors. – XINHUA