Tesla board forms committee to consider going private

15 August, 2018, 00:39 | Author: Darnell Patrick
  • Tesla looking to go private with backing of Saudi fund

He said the Saudi sovereign fund has recently purchased nearly 5 percent of the Silicon Valley-based electric vehicle maker's stocks on the public markets, and that the fund's managing director "strongly expressed his support for funding a going private transaction for Tesla at this time".

He said the Saudis were interested "because of the important need to diversify away from oil" and added that the sovereign fund "has more than enough capital needed to execute on such a transaction". Private equity firm Silver Lake is also not signed up officially as a financial adviser, as it is helping Musk explore how to take Tesla private with no compensation, Reuters reported on Monday. Their investigation is part of a larger probe into the information Musk provides on Twitter, including sales targets and other goals.

Shares of Tesla Inc. jumped 11 percent in a day, raising the value of the company by $6 billion.

Musk said in the blog post that the Saudi fund had offered to take Tesla private multiple times, beginning early a year ago, with the goal of diversifying their investments away from oil.

Goldman declined to comment on Tuesday.

The committee has the authority to evaluate and negotiate a potential deal, or any alternatives proposed by Mr. Musk, on the board's behalf, Tesla said.


Citing two people familiar with the internal response to Musk's August 7 tweet, The Times said the Tesla CEO had sent that tweet "with little forethought". In his proposal, existing shareholders could remain as they are in a private Tesla, or agree to the buyout amount per share.

The decision to announce the plan, which Musk has since expanded upon, via Twitter "had not been cleared ahead of time with the company's board", The Times wrote.

The independent directors are Robyn Denholm, Brad Buss and Linda Johnson Rice.

Wall Street had voiced doubts about Musk's ability to pull off what could be the largest-ever go-private transaction, valued at as much as $72 billion.

The special committee has retained lawyers - Latham & Watkins - in addition to a legal team used by the company. Wilson Sonsini Goodrich and Rosati will be legal counsel for Tesla itself.

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