Tesla

In a new blog post today penned by Tesla CEO Elon Musk, The EV maker leader dished more information about the considered Tesla take over at $420 per share with Musk outing key info which includes that the proposed deal would not outcome as an outright acquisition of all Tesla stock as shareholders who desire to keep shares in a newly formed private entity would be allowed to do so along with the Tesla CEO stating that the Saudi Arabian sovereign wealth fund has made discussions about taking Tesla private multiple times “in an important bid to diversify from oil”.

Musk defended his tweet of stating “funding secured” already for the deal stating that by the time He concluded a July 31st meeting with the Saudi sovereign fund which had built up a 5% stake in the EV maker,A deal was already sure of being closed with the country’s investment fund.

Quoting Musk:

• “I left the July 31st meeting with no question that a deal with the Saudi sovereign fund could be closed, and that it was just a matter of getting the process moving. This is why I referred to “funding secured” in the August 7th announcement.” 

Musk also states he has continued to communicate with the Saudi fund Managing Director who he says has expressed support for a proceeding deal subject to due diligence and other internal review processes for obtaining approval with additional details being asked concerning the process of taking Tesla private the wealth fund Managing Director.

 This would imply that as opposed to a calculation of a deal of taking the EV maker private being valued at over $70 Billion, The value might come as less than that as several of its investors and shareholders may choose to keep shares in the private entity to be formed in the case of an acquisition.

Musk also states he has reached out to several of the company’s largest investors who have been supportive of the company so it makes sense that some of them might choose to keep stakes in the private entity after a completed deal.

The post also notes that most of the deal would be funded by equity rather than debt implying that the acquisition would not come in form of a leveraged buyout structure commonly used in taking large companies private with Musk talking of a process to burden Tesla with significantly increased debt of not being wise.

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