Musk says Silver Lake, Goldman advising on taking Tesla private

Tesla Chief Executive Elon Musk tweeted on August 13 that he was working with buyout firm Silver Lake and investment bank Goldman Sachs Group as financial advisers on his plan to take the US electric car maker private.

The announcement represents the latest effort by Musk to add credibility to his proposed $72 billion deal for Tesla, following his tweet last week that funding for it was “secured”. That earlier tweet has triggered investor lawsuits as well as an investigation by the US Securities and Exchange Commission into the accuracy of his statement.

Musk also posted in a blog post on August 13 his most detailed vision yet into how a Tesla take-private deal could work, but shares in the car maker ended flat, indicating investor skepticism over its feasibility.

A source familiar with the matter said Silver Lake was offering its assistance to Musk in his exploration of a deal without compensation, and had not been hired as a financial adviser in an official capacity. The firm is known for putting together leveraged buyouts in the technology sector rather than providing investment banking advice.

Moreover, Silver Lake, which contributed $1.4 billion in equity to Michael Dell’s deal in 2013 to take the eponymous US computer maker private, is not currently discussing participating in the potential Tesla deal as an investor, the source added. Silver Lake and Goldman Sachs declined to comment.

Musk also said law firms Wachtell, Lipton, Rosen & Katz and Munger, Tolles & Olson would be legal advisers on the plan. Both law firms did not immediately respond to requests for comment.

Musk shocked markets last week with the tweeted announcement that he was considering taking Tesla private for $420 a share. Tesla shares ended trading on August 13 at $356.41.

Musk said earlier on August 13 that the manager of Saudi Arabia’s sovereign wealth fund had voiced support for the company going private several times, including as recently as two weeks ago, but also said that talks continue with the fund and other investors.

“I left the July 31st meeting (with the Saudi fund) 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,” Musk said.

“This is why I referred to ‘funding secured’ in the August 7th announcement.”

The Saudi fund over nearly two years had approached him repeatedly about taking the company private, Musk said, and the latest meeting came after it took a nearly 5 per cent stake in Tesla.

Saudi Arabia’s Public Investment Fund (PIF) manages more than $230 billion in assets, but about 65 per cent 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 US infrastructure fund or SoftBank Group Corp’s Vision Fund.

The Saudi fund intends to sell its $70 billion stake in Saudi Basic Industries to oil giant Aramco, which could free up funds for new deals, but that sale may take months to conclude.

Yasir Othman al-Rumayyan, managing director of the PIF, referred Reuters to the corporate communications team, which did not immediately respond to a request for comment.