Musk in talks with Saudi fund, others on Tesla buyout

  • Musk in talks with Saudi fund, others on Tesla buyout

Musk in talks with Saudi fund, others on Tesla buyout

Tesla is forming a special committee to evaluate proposals to take the company private one week after CEO Elon Musk said he was considering it. It also blindsided some on the board of the electric vehicle maker. Reuters reported that Silver Lake had not been retained as a financial advisor but was offering assistance to Musk, according to a source familiar with the matter.

Jeremy Zucker, co-head of Dechert's International Trade practice, said two key determinations would be made if a deal moved forward: whether Tesla contained critical technologies and whether the involvement of Saudi financing was a national security issue.

Musk said in a statement posted on the Tesla website on Monday that the Saudi sovereign fund had first contacted him "at the beginning of 2017 to express (their) interest because of the important need to diversify away from oil".

As for the money to be paid by the Saudis should a deal be reached, Musk says the sum is nowhere near the $70 billion the media talks about for the simple reason that the fund will not buy all the company's stock, but only that of the people who do not remain with the company if it is private. "I understood from him that no other decision makers were needed and that they were eager to proceed", he wrote.

The announcement represents the latest effort by Musk to add credibility to his proposed $72 billion deal for Tesla, following his tweet last week that funding for it was "secured".

Musk on Monday estimated two-thirds of existing Tesla shareholders would roll over their holdings into a private company, but said that he was still talking with major shareholders and advisers before settling on a structure for the deal. Shorts lost almost $2 billion in mark-to-market losses when the stock shot up after Musk tweeted about going private.

"No assurances can be given regarding the likelihood, terms and details of any proposal or potential going private transaction, that any proposal made by Mr. Musk. will be accepted by the special committee", the statement said.

The board had confirmed earlier this month that it had "met several times over the last week" to discuss going private. The full board agreed to have Musk discuss the idea with some of Tesla's biggest investors.