Tesla forms three-member panel to decide on any Musk deal

Daniel Fowler
August 14, 2018

Musk is going full steam ahead and working with financial advisors Silver Lake and Goldman Sachs as well as receiving legal advice from law firms Wachtell, Lipton, Rosen & Katz and Munger, Tolles & Olson. Funding to take the company private is apparently secured as well.

On Monday, he said financing had been discussed with Saudi Arabia.

Musk said on Monday he was in talks with a Saudi sovereign fund for taking the electric auto maker private.

"Recently, after the Saudi fund bought nearly 5% of Tesla stock through the public markets, they reached out to ask for another meeting", Musk wrote in the update.

Shares of Tesla slipped $3.15, or less than 1 percent, to $353.26 in early trading Tuesday.

According to two unnamed people familiar with the fallout who talked to The Times about Musk's online musings, the Tesla CEO allegedly told an informal adviser that he posted on Twitter "impulsively", and said he was "not the kind of person who could hold things in", and admitted he "was angry at the company's critics". The statement makes it clear that nothing Musk has tweeted so far is a done deal.

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Saudi Arabia's Public Investment Fund (PIF) manages more than $230 billion in assets, but about 65 percent of that is stakes in large Saudi companies and most of the rest has been committed in overseas deals such as funding commitments to Blackstone Group LP's USA infrastructure fund or SoftBank Group Corp's Vision Fund.

PIF officials have said in the past that decisions at the sovereign wealth fund are made with care, emphasising corporate governance.

Meanwhile, Musk faces scrutiny of his tweet on secured funding.

"No assurances can be given regarding the likelihood, terms and details of any proposal or potential going private transaction, that any proposal made by Mr. Musk. will be accepted by the special committee", the statement said. It was Tesla's last big deal and was criticized by some on Wall Street because the company, founded by two of Musk's cousins, had seen its business shrink before the takeover.

"Despite Elon Musk's frustration with being a public company, I think there are more advantages to remaining public", said CFRA analyst Efraim Levy, citing cheaper access to capital and media exposure due to interest in a public company.

A major investment from Saudi Arabia would likely trigger a review by the Committee on Foreign Investment in the United States, which scrutinizes deals for potential national security concerns.

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