Tesla directors: 'No formal proposal' to take company private

Jeannie Matthews
August 15, 2018

Musk said on Monday he was in talks with a Saudi sovereign fund for taking the electric vehicle maker private.

"The special committee has not yet received a formal proposal from Mr. Musk regarding any Going Private Transaction", the company said in a public filing with US securities regulators, the first it has made since Musk's tweets last week. These comments sparked suspicion that Musk could be manipulating the stock price of Tesla, unless he was stating facts, and this suspicion in turn prompted the revelation.

Musk said that since his Twitter post on the possibility of a deal the managing director of the Saudi fund had expressed support for proceeding subject to financial and other due diligence.

According to Musk, "two thirds" of Tesla's current stockholders would be interested in continuing to hold the firm's shares once it goes private.

"I'm excited to work with Silver Lake and Goldman Sachs", Musk tweeted on Monday. Musk said his decision to announce his negotiations publicly was in the interest of all investors, as it wouldn't have been fair to only tell the largest share holders.

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Investigators in the Securities and Exchange Commission's San Francisco office are also scrutinizing Musk's moves. In his proposal, existing shareholders could remain as they are in a private Tesla, or agree to the buyout amount per share. Those overtures continued, culminating in a meeting on July 31, Musk said.

Musk on Monday said he was talking to other potential investors but did not provide any details on the exact source of funding. He said the board's outside directors discussed going private without Musk or his brother Kimbal Musk, a board member, present.

Last week, Musk was sued by investors who accused him of having made the announcement to take the firm private to harm so-called "short sellers", people who sell the firm's shares anticipating a drop in the market price and with whom Musk has been engaged in open warfare for some time, contending that they are harming the firm's growth plans.

Tesla's board said on August 8 that Musk had held talks with the directors in the previous week on taking the company private.

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