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Elon Musk says Saudis back Tesla buyout | Elon Musk says Saudis back Tesla buyout |
(about 3 hours later) | |
Elon Musk has outlined his plan to take Tesla private and said he discussed financing the deal with Saudi Arabia. | Elon Musk has outlined his plan to take Tesla private and said he discussed financing the deal with Saudi Arabia. |
The founder of the electric carmaker also indicated that he would need to raise far less than the $70bn it has been estimated he would need. | The founder of the electric carmaker also indicated that he would need to raise far less than the $70bn it has been estimated he would need. |
In a blog post, Mr Musk said that he only wanted to buy out shareholders who no longer wanted to own Tesla shares. | In a blog post, Mr Musk said that he only wanted to buy out shareholders who no longer wanted to own Tesla shares. |
The announcement comes just days after investors filed a lawsuit claiming that he misled the market. | The announcement comes just days after investors filed a lawsuit claiming that he misled the market. |
Mr Musk announced on Twitter on 7 August that he was considering taking Tesla private, adding "funding secured". | Mr Musk announced on Twitter on 7 August that he was considering taking Tesla private, adding "funding secured". |
Since then he has been facing questions about where he would obtain the funding for his proposed $420 a share offer. | Since then he has been facing questions about where he would obtain the funding for his proposed $420 a share offer. |
Shares in Tesla rose slightly to $357 in morning trading in New York. | Shares in Tesla rose slightly to $357 in morning trading in New York. |
They have fallen back from the highs near $380 they touched after his initial tweet. The investors suing Tesla are short-sellers, who bet on share prices falling and claim to have lost millions as a result of Mr Musk's comments. | They have fallen back from the highs near $380 they touched after his initial tweet. The investors suing Tesla are short-sellers, who bet on share prices falling and claim to have lost millions as a result of Mr Musk's comments. |
On Monday, the Tesla founder said he had met with the Saudi sovereign wealth fund after it bought a 5% stake in the company. | On Monday, the Tesla founder said he had met with the Saudi sovereign wealth fund after it bought a 5% stake in the company. |
He left that meeting on 31 July "with no question that a deal ... could be closed - it was just matter of getting the process moving". | He left that meeting on 31 July "with no question that a deal ... could be closed - it was just matter of getting the process moving". |
The fund was "eager to proceed" with financing "a going private transaction" after that meeting, Mr Musk said. | The fund was "eager to proceed" with financing "a going private transaction" after that meeting, Mr Musk said. |
The Saudi fund had approached him "multiple times" since the start of last year about taking the company private, Mr Musk said. | The Saudi fund had approached him "multiple times" since the start of last year about taking the company private, Mr Musk said. |
"They first met with me at the beginning of 2017 to express this interest because of the important need to diversify away from oil," he said. | "They first met with me at the beginning of 2017 to express this interest because of the important need to diversify away from oil," he said. |
Mr Musk, who owns almost 20% of Tesla, had sent the tweet so he could "reach out" to the company's largest investors to see they were interested in backing a deal. | Mr Musk, who owns almost 20% of Tesla, had sent the tweet so he could "reach out" to the company's largest investors to see they were interested in backing a deal. |
Since then, he said he had kept in touch with the Saudi fund and that its managing director had "expressed support" for proceeding with the deal, subject to legal checks. | Since then, he said he had kept in touch with the Saudi fund and that its managing director had "expressed support" for proceeding with the deal, subject to legal checks. |
Mr Musk said he would not need $70bn to buy out all shareholders as he only intended to offer $420 a share to those who did not want to remain investors if the company did go private. | |
"My best estimate right now is that approximately two thirds of shares owned by all current investors would roll over into a private Tesla," he said. | "My best estimate right now is that approximately two thirds of shares owned by all current investors would roll over into a private Tesla," he said. |
The plan means Mr Musk would not need to borrow huge sums to pull off the deal. | The plan means Mr Musk would not need to borrow huge sums to pull off the deal. |
He has said that de-listing the company from the stock market would avoid pressure to meet quarterly financial targets and end "negative propaganda" from short-sellers. | He has said that de-listing the company from the stock market would avoid pressure to meet quarterly financial targets and end "negative propaganda" from short-sellers. |