Musk says in talks with Saudis, others on taking Tesla private

Tesla, Elon Musk sued and official enquiries made over Twitter claims

Saudi Arabia's Public Investment Fund (PIF) has shown no interest so far in financing Tesla Inc CEO Elon Musk's proposed $72 billion deal to take the USA electric auto maker private, despite acquiring a minority stake in the company this year, two sources familiar with the matter said.

On Tuesday he tweeted that he had secured funding to buy all Tesla shares and take the company private.

That blog post appears to name Saudi Arabia's sovereign wealth fund as being responsible for the funding that Musk said was "secured" in his tweet. Discussions began before the controversial August 7 tweet by Musk, who is Tesla's co-founder and chief executive officer, saying he was weighing a plan to take the company private.

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. The country's Public Investment Fund, which has built up a stake of nearly 5 per cent in Tesla in recent months, is exploring how it can be involved in the potential deal, according to Bloomberg. He wrote that since the meeting, he has maintained contact with the fund's managing director - suggesting that discussions are continuing.

He added that most capital for the deal would come from equity and it would not be "wise" to burden the company with added debt.

In a separate class-action lawsuit also filed in federal court in San Francisco, William Chamberlain contends Musk "materially" misled investors between August 7 and August 10 claiming investor support for the deal was secured and that the funding was in place. It is appropriate to complete those discussions before presenting a detailed proposal to an independent board committee.

It also reflects the fact that Tesla, once the clear leader in the electric-car market, is facing increasing competition and has yet to deliver on its mass production ambitions.

Billionaire founder Musk would prefer to amass a group of investors who could each contribute part of the funds because he wants to avoid having one or two large new stakeholders in the company, the people said.

As a result, Tesla shares jumped 11 per cent, causing so-called short-sellers who have been betting on the stock crashing for years to lose millions.

The tweets are aimed at "shorts", or investors who borrowed shares of Tesla and immediately sold them with the hope that Tesla's share price would fall.

What are the next steps? Among other things, this will allow me to obtain a more precise understanding of how many of Tesla's existing public shareholders would remain shareholders if we became private. "The only reason why this is not certain is that it's contingent on a shareholder vote".

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