Elon Musk elaborated on what precipitated his effort to take Tesla Inc. private, portraying the interest that Saudi Arabia’s sovereign wealth fund has shown in the electric-car maker as key to the gambit.
The Saudi Kingdom’s Public Investment Fund had approached Musk going back almost two years about taking Tesla off the market, he wrote in a blog post Monday, confirming that the fund recently bought an almost 5% stake. Musk described a July 31 meeting in which the Saudi fund’s managing director expressed regret that Tesla hadn’t moved forward with a go-private transaction.
“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,” Musk wrote in the post. He said this is why he tweeted on Aug. 7 that he had “funding secured” to take Tesla private at $420 a share.
Tesla rose as much as 1.8% to $362 as of shortly after the open of regular trading.
Musk, 47, said he’s continued to communicate with the Saudi fund managing director, whom he didn’t identify by name. He said he’s been reaching out to Tesla’s largest shareholders and that most of the capital required to take the company private will be funded by equity, rather than debt.
“The $420 buyout price would only be used for Tesla shareholders who do not remain with our company if it is private,” he wrote. “My best estimate right now is that approximately two-thirds of shares owned by all current investors would roll over into a private Tesla.”
By Dana Hull