Giant Saudi fund emerges as backer of bid for Elon Musk's Tesla

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Tesla (TSLA.O) Chief Executive Elon Musk said on Monday he was still in talks with potential backers of a possible buyout of the company, including Saudi Arabia's sovereign wealth fund, but had not completed securing the funding.

Following Musk's bold announcement last week that he would take the company private at $420 per share, Tesla's stock initially shot up 11 percent.

Musk says he left a meeting with wealth fund officials July 31 with no question that the deal could be closed.

"During the meeting, the Managing Director of the fund expressed regret that I had not moved forward previously on a going private transaction with them, and he strongly expressed his support for funding a going private transaction for Tesla at this time", Musk said. "I understood from him that no other decision makers were needed and that they were eager to proceed", Musk wrote in the blog.

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Recently, after the Saudi fund bought nearly 5% of Tesla stock through the public markets, they reached out to ask for another meeting. Musk and SoftBank Group's Masayoshi Son held talks past year that touched on taking Tesla private, two people with knowledge of the talks have said. Musk said he has continued to communicate with the sovereign fund's managing director since last week, and that the managing director has "expressed support for proceeding subject to financial and other due diligence".

Musk's August 7 tweets helped push Tesla's stock price more than 13 percent above the prior day's close. Once those discussions are complete, Musk will bring a proposal to Tesla's board.

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.

According to Reuters, the separate lawsuits by Kalman Isaacs and William Chamberlain accuse Tesla and Musk of issuing statements that are in violation of securities law, artificially boosting the stock price, and putting a squeeze on short sellers. Musk has said he still expects to own about 20 percent of Tesla after any transaction, and that he hopes all shareholders will remain owners of a private company.

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Tesla shares were down a fraction of a percentage point in late-morning trading, and they had lost about 6 percent of their value since shooting up Tuesday following Musk's Twitter bombshell.

Musk wrote that at the July 31 meeting, the fund's managing director "strongly expressed his support" for taking the electric auto and solar panel maker private.

What are the next steps? "So the potential investor must be patient and strategic-looking". If the board approves the deal, then it would go to a vote of shareholders.

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