Elon Musk says Saudis back Tesla buyout

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Elon Musk.
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Elon Musk has outlined his plan to take Tesla private and said he discussed financing the deal with backing from Saudi Arabia.

The founder of the electric car maker also indicated that he would need to raise far less than the $70bn it has been estimated he would need.

In a blog post, Mr Musk said that he only wanted to buy out shareholders who no longer wanted to own Tesla shares.

The Saudi sovereign wealth fund recently bought a 5% stake in Tesla.

Mr Musk announced on Twitter on 7 August that he was considering taking Tesla private, adding “funding secured”.

Since then he has been facing questions about where he would obtain the funding for his proposed $420 a share offer.

Shares in Tesla rose slightly to $357 in morning trading in New York.

On Monday Mr Musk said he would not need $70bn to buy out all shareholders as he only intended to offer $420 a share to those who did want to remain investors if the company did go 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,” he said.

The plan would mean Mr Musk would not need to borrow huge sums to pull off the deal.

The Tesla founder also said he had met with the Saudi sovereign wealth fund, which he left “with no question that a deal … could be closed – it was just matter of getting the process moving”.

The Saudi fund had approached him “multiple times” since the start of 2017 about taking the company private, Mr Musk said.

“They first met with me at the beginning of 2017 to express this interest because of the important need to diversity away from oil,” he said.

Last month’s meeting took place just after the Saudi fund had bought its stake in Tesla.

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