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| Elon Musk Says Meetings With Saudis Preceded Tweet on Taking Tesla Private | Elon Musk Says Meetings With Saudis Preceded Tweet on Taking Tesla Private |
| (about 1 hour later) | |
| Elon Musk, Tesla’s chief executive, said on Monday that he had held meetings with representatives of a Saudi Arabian sovereign wealth fund who expressed an eagerness to help him take the electric carmaker private. | |
| Writing in a post on Tesla’s corporate blog, Mr. Musk offered his fullest explanation yet for what he said were the circumstances behind his Aug. 7 message on Twitter that he was “considering taking Tesla private at $420” and had “funding secured.” The post sent Wall Street scrambling for more information. | Writing in a post on Tesla’s corporate blog, Mr. Musk offered his fullest explanation yet for what he said were the circumstances behind his Aug. 7 message on Twitter that he was “considering taking Tesla private at $420” and had “funding secured.” The post sent Wall Street scrambling for more information. |
| In the blog post, Mr. Musk said the Saudi fund had approached him several times about taking the company private as part of the country’s efforts to diversify its economy beyond oil. | |
| Mr. Musk said that after several meetings that began in early 2017, he had left talks with the fund’s managing director on July 31 “with no question” that a deal could be closed and “that it was just a matter of getting the process moving.” | |
| “I understood from him that no other decision makers were needed and that they were eager to proceed,” Mr. Musk wrote. He added that he had stayed in contact with representatives of Saudi fund, which he said had recently bought a stake of almost 5 percent in Tesla, and has also been in touch with other investors. | |
| Mr. Musk said he had notified the Tesla board of his intentions on Aug. 2. | |
| He said he had decided to make a public announcement on Twitter because he felt “it would be the right and fair thing to do so that all investors had the same information at the same time.” | |
| Tesla shares jumped nearly 11 percent after the Twitter post, and officials at the Securities and Exchange Commission contacted the company to ask why Mr. Musk had not made the announcement in a regulatory filing. | |
| Mr. Musk said Tesla’s board was forming a special committee to evaluate any potential plans to go private. He stressed that the process would largely be financed through equity, rather than through a more common leveraged buyout approach. | |
| “I do not think it would be wise to burden Tesla with significantly increased debt,” he wrote. | |
| Mr. Musk said his “best estimate” was that two-thirds of Tesla’s current shareholders would decide to keep their shares. In that scenario, he said, the sum needed to take the company private would be far less than the $70 billion theoretically required if all shares were bought for $420 apiece. | |
| Bankers and lawyers have estimated that a deal to take Tesla private could cost $10 billion to $20 billion. | |
| Tesla shares were down about 1 percent in midday trading on Monday. |