Saudi Arabia's sovereign wealth fund would be the main source of money for Tesla CEO Elon Musk's grand plan to take the company private, but the deal isn't done yet, Musk disclosed in a blog on Monday.
The fund approached Musk about going private multiple times during the past two years, and Musk says he left a July 31 meeting with no question that the deal would be closed. That's why he tweeted on Aug. 7 that the funding had been secured, Musk wrote. The fund itself has not publicly commented on the possibility of a deal.
Under the proposal, only investors who don't want to remain with a private company would be paid and funding for the deal would come from Tesla stock, not debt. Musk wrote that he expects about one-third of shareholders to take an offer of $420 per share, making the buyouts worth roughly $23.6 billion.
Musk's blog was posted before the markets opened Monday, and there was little reaction from investors. Shares were up 2 cents to $355.51 in morning trading.
Musk wrote that at the July 31 meeting, the fund's managing director "strongly expressed his support'' for taking the electric car and solar panel maker private. "I understood from him that no other decision makers were needed and that they were eager to proceed,'' Musk wrote in the blog.
But the deal appeared to be far from finished. Since the meeting, the men have continued discussions and the managing director has expressed support "subject to financial and other due diligence and their internal review process for obtaining approvals,'' Musk wrote.
The wealth fund recently bought nearly 5 percent of Tesla's shares.
Musk wrote that he made the Aug. 7 announcement because he had talked to large investors about his desire to take the company private. "It wouldn't be right to share information about going private with just our largest investors without sharing the same information with all investors at the same time,'' he wrote.
He wrote that in the blog and the Aug. 7 tweet that he was speaking for himself as a potential bidder for the company.
Musk also wrote that the Saudis are interested in the company because they want to diversify away from oil.
He also is in talks with other investors because he wants Tesla to continue to have a "broad investor base,'' he wrote.