Wealth Manager - the site for professional investment managers

Register free for our breaking news email alerts with analysis and cutting edge commentary from our award winning team. Registration only takes a minute.

Musk touts Saudi backing for $72bn Tesla buyout

1 Comment
Musk touts Saudi backing for $72bn Tesla buyout

Tesla chief executive Elon Musk has claimed a Saudi sovereign wealth fund has shown interest in taking the company private, as he sought to explain a claim that funding had been secured for a buyout.

Shares in the belagured carmaker - which had faced increasing scepticism about its sustainability in recent months - rocketed 7% last week after Musk tweeted 'funding [had been] secured' to take the business off market at a price of $420 a share, a premium of almost 23%.  

That would put a value of $72 billion (£56.3 billion) on the business, leading some to question his claim. Investors launched a lawsuit against Musk on Friday, alleging he had artificially inflated Tesla’s price, breaking US securities law.

In a blog post on the company’s website, Musk said the director of the Saudi fund had ‘strongly expressed his support for funding a going private transaction for Tesla’ in a meeting on 31 July.

Musk said he had been in talks with the Saudi sovereign fund since the beginning of 2017, and following last week’s Twitter announcement its director had ‘expressed support for proceeding subject to financial and other due diligence and their internal review process.’

Musk said he had made the announcement via Twitter rather than a conventionaly regulated message because ‘it wouldn’t be right to share information about going private with just our largest investors without sharing the same information with all investors at the same time.’

That followed a meeting of Tesla’s board regarding the matter, in which he informed the board about the funding discussions, according to the post.

Musk added that, in addition to the Saudi fund, he is also 'having discussions with a number of other investors' about going private, and that after these are concluded full details of the plan will be provided.

Capital for the move would be in the form of equity rather than debt, with Musk estimating the current holders of two thirds of the shares in the business would continue to hold it off-market.

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.
Citywire TV
Play Tim Steer: fund managers will have to get 'stuck in'

Tim Steer: fund managers will have to get 'stuck in'

The second part of our film with former Artemis and New Star fund manager Tim Steer looks at how his profession has evolved over the past two decades.

2 Comments Play Tim Steer: how to spot a stock disaster coming

Tim Steer: how to spot a stock disaster coming

The former Citywire AAA-rated fund manager has written a book on 22 stock disasters and how forensic examination of annual reports could have spotted them coming.

Play CEO tapes: the gap between best and worst alternatives is stark

CEO tapes: the gap between best and worst alternatives is stark

In the final part of our series we take a look at the rise of illiquid investing and whether it really serves in clients best interests.

Read More
Your Business: Cover Star Club

Profile: why the world of wealth is fracturing

Profile: why the world of wealth is fracturing

The problem with wealth management, according to Robert Paul, London & Capital’s youngest ever partner, is that it is very antiquated.

Wealth Manager on Twitter