Goldman Sachs and Silver Lake are the financial advisors to Tesla on chief executive Elon Musk's plan to take the company private, he said in a tweet. The tweet followed the publication of an update from Musk on the plan that took markets by surprise last week.
In the update, Musk revealed he has been in talks with the Saudi Arabian sovereign wealth fund about taking Tesla private for a few years now, in response to questions about comments he made last week on Twitter that the funding for taking Tesla private had been secured. These comments sparked suspicion that Musk could be manipulating the stock price of Tesla, unless he was stating facts, and this suspicion in turn prompted the revelation.
"Recently, after the Saudi fund bought almost 5% of Tesla stock through the public markets, they reached out to ask for another meeting," Musk wrote in the update. "That meeting took place on July 31st. During the meeting, the Managing Director of the fund expressed regret that I had not moved forward previously on a going private transaction with them, and he strongly expressed his support for funding a going private transaction for Tesla at this time. I understood from him that no other decision makers were needed and that they were eager to proceed."
Related: PDVSA To Start Using 'El Petro' Next Week
Negotiations are still ongoing with the Saudi sovereign wealth fund and with several other investors. Reports that it would cost US$70 billion to take Tesla private, Musk said, were a stretch, adding that it would actually cost less than that. "The $420 buyout price would only be used for Tesla shareholders who do not remain with our company if it is 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," Musk said.
The funding needed for the buyout would be raised from equity and not debt, because Tesla has enough debt as it is, the company's CEO also said, adding that the board will review all the information accumulated in the run-up to a formal proposal and will then make a decision. He did not specify a timeframe for this decision.
By Irina Slav for Oilprice.
More Top Reads From Oilprice.com:
Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry. More