Tesla’s Elon Musk disclosed today that his plan to take the company private was being driven by Saudi Arabia’s sovereign wealth fund.
Facing growing controversy over his announcement of the plan last week via a series of tweets, Musk wrote a lengthier explanation in which he said the fund has been offering to back such a move since early last year.
“Going back almost two years, the Saudi Arabian sovereign wealth fund has approached me multiple times about taking Tesla private,” Musk wrote. “They first met with me at the beginning of 2017 to express this interest because of the important need to diversify away from oil. They then held several additional meetings with me over the next year to reiterate this interest and to try to move forward with a going private transaction. Obviously, the Saudi sovereign fund has more than enough capital needed to execute on such a transaction.”
Musk made the potential move public on August 7 when he tweeted:
Am considering taking Tesla private at $420. Funding secured.
— Elon Musk (@elonmusk) August 7, 2018
The surprise revelation of a deal that would value Tesla at $72 billion prompted questions about whether Musk had violated securities laws, how much Tesla’s board knew about the deal, and even why Nasdaq was slow to halt trading of the stock at the time.
In his note, Musk attempted to finesse these issues by saying he was announcing the offer as a private buyer, and not in his capacity as CEO. He said he had originally made the offer to the board on August 2 — five days before his tweet — and had decided to tweet the news because it was the best way to communicate with Tesla’s investors and gauge their support.
“It was clear to me that the right thing to do was announce my intentions publicly,” he wrote. “To be clear, when I made the public announcement, just as with this blog post and all other discussions I have had on this topic, I am speaking for myself as a potential bidder for Tesla.”
Musk said no official deal has been made with the Saudi fund. Amid continuing talks with the fund, Musk said he is also talking with shareholders. And independent members of the board have met several times to discuss the potential offer and the process for making a decision, meetings at which Musk said he was not present.
There was no timetable offered for how long the next steps may take.
“If and when a final proposal is presented, an appropriate evaluation process will be undertaken by a special committee of Tesla’s board, which I understand is already in the process of being set up, together with the legal counsel it has selected,” Musk wrote. “If the board process results in an approved plan, any required regulatory approvals will need to be obtained, and the plan will be presented to Tesla shareholders for a vote.”