Elon Musk in talks with Saudi fund to take Tesla private

People look at cars at a Tesla showroom in New York City. Tesla CEO Elon Musk reportedly under scrutiny by federal regulators for earlier statements says Saudi Arabia's sovereign wealth fund is looking to diversify away from oil with a bigger inves

Tesla (TSLA.O) Chief Executive Elon Musk said on Monday he was still in talks with potential backers of a possible buyout of the company, including Saudi Arabia's sovereign wealth fund, but had not completed securing the funding.

In a blog post, Musk said the wealth fund has approached him "multiple times" over the past two years to discuss funding for privatization, most recently on July 31.

Despite tweeting on Tuesday that funding had been secured, Musk's newest blog post appears to contradict that claim.

Musk has also said he would be looking to keep his ownership of Tesla at around 20 percent in a buyout deal, and that a special goal vehicle, like the one that exists at his aerospace company SpaceX, would allow Tesla shareholders to remain invested if they so choose.

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.

Recently, after the Saudi fund bought nearly 5% of Tesla stock through the public markets, they reached out to ask for another meeting. If shareholders also approve, then each shareholder would have to decide whether to take $420 per share in cash-or to accept shares in the new, private Tesla instead.

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Reuters reported on August 11 that the PIF has shown no interest so far in financing Musk's proposed deal, while CNBC said on August 9 that Musk previously talked with the Saudi fund about a take-private deal, citing one person familiar with the matter.

The U.S. Securities and Exchange Commission has contacted Tesla to ask about Musk's assertion on Twitter that funding for his proposed deal was "secured", the Wall Street Journal reported on Wednesday. Once those discussions are complete, Musk will bring a proposal to Tesla's board.

Musk's failure to promptly file a formal disclosure has led to lawsuits from investors, accusing Tesla of fraudulently planning to squeeze short-sellers.

The transaction would be structured with equity so as not to burden Tesla with crushing debt, Musk added. Tesla's shares briefly turned negative on the news and traded up 0.8 percent at 4:05 p.m.in NY.

Musk says that means reports suggesting Tesla would need more than $70 billion to go private "dramatically overstate the actual capital raise needed". People close to at least 16 financial institutions and technology firms, who spoke on the condition of anonymity, have said they weren't aware of financing having been locked in before Musk's tweet. Among other things, this will allow me to obtain a more precise understanding of how many of Tesla's existing public shareholders would remain shareholders if we became private.

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