Saudi Arabia’s sovereign wealth fund is in talks that could see it becoming a significant investor in Tesla as part of Elon Musk’s plan to take the electric car maker private, according to a person with direct knowledge of the fund’s plans.
The Public Investment Fund, which has built up a stake just shy of 5 percent in Tesla in recent months, is exploring how it can be involved in the potential deal, the person said on condition of anonymity. Discussions began before the controversial Aug. 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.
The Saudi fund hasn’t made any firm decision on whether to increase its stake, or by how much, but talks are ongoing, the person said. It wasn’t immediately clear how much the fund would invest in Tesla.
Am considering taking Tesla private at $420. Funding secured.— Elon Musk (@elonmusk) 7 August 2018
Musk’s tweet stunned investors, with many raising questions about his claim that funding for the venture had been secured. While the entrepreneur owns 20 percent of Tesla, more than $60 billion would be needed to buy the business from public shareholders.
The PIF didn’t immediately respond to requests to comment. Tesla had no immediate comment.
Discussions over taking Tesla private have failed before. Musk and SoftBank Group’s Masayoshi Son held talks last year that touched on taking Tesla private, two people with knowledge of the discussions have said. The discussions failed to progress due to disagreements over ownership.
Reuters reported on Aug. 11 that the PIF has shown no interest so far in financing Musk’s proposed deal.
The Saudi wealth fund’s current stake in the company is valued at about $2 billion. The government is planning to turn the PIF into a $2 trillion powerhouse to help diversify the kingdom’s oil-dependent economy.