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Musk touts Saudi backing for $72bn Tesla buyout

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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.

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