Tesla CEO Musk says Saudi fund wants to take company private

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Saudi Arabia's sovereign wealth fund is in talks to increase its investment in Tesla as part of Elon Musk's buyout plan.

However, Reuters reports that PIF has shown no interest so far in financing Musk's proposed $72 billion deal to take the USA electric auto maker private. The talks between the Saudi fund and Tesla reportedly began before Musk's tweet on August 7. They are the ones who believed in Tesla when no one else did and they are the ones who most believe in our future.

In laying out why he is considering taking Tesla private, Musk pointed in part to shorts.

"My best estimate right now is that approximately two-thirds of shares owned by all current investors would roll over into a private Tesla".

That same day, Musk said on Twitter that he was "considering" taking the company private at a $420 buyout price and that funding had already been secured.

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.

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If such a deal goes through, and is approved by both shareholders and the SEC, it will require about US$72 billion ($97 billion) in funding.

"When you have these grand-vision companies, the founders - these leaders - don't want to have some investors have control", Gene Munster, a managing partner at venture capital firm Loup Ventures said in a Bloomberg TV interview, talking about the idea that Musk wouldn't want to bring in any large new shareholders.

The Saudi fund's talks began before the controversial August 7 tweet in which Musk said he was weighing a plan to take the company private. "At this stage, it is hard for Tesla to convince the general investors that delivery will ramp up quickly". Musk and his advisers are seeking a wide pool of investors to back a potential take-private of the automaker to avoid concentrating ownership among a few new large holders, according to people familiar with the matter.

Musk wrote in an internal letter last week that he would like to restructure Tesla in the image of SpaceX, his commercial space company, by giving Tesla employees company shares and allowing them to buy or sell them. As a result, PIF itself chose to buy around $2 billion in Tesla shares, reportedly with the help of an investment bank.

SoftBank's decision to back away from any potential Tesla take-private is noteworthy given its self-styled reputation as the investor du jour for any technology or tech-enabled asset that comes to market. The Saudi government is trying to diversify the country's economy which is dependent on oil.

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