Musk Explains Plan to Take Tesla Private

Tesla Inc. CEO Elon Musk, who announced on Aug. 7 that funding to take the company private had been secured, now says he is merely “considering” taking Tesla private.

Musk explains his rationale in a new blog post that appeared earlier today, saying he notified the Tesla board about his desire to privatize the company on Aug. 2.

He says he proposed that Tesla pay $420 per share only to stockholders who don’t want the company to be delisted. Shareholders who agree with the plan would keep their shares but receive no additional payment.

Musk estimates that only one-third of Tesla shareholders would opt to sell out if the company goes private. Thus, he says, the cost of the scheme would be “dramatically” less than the $71 billion price mentioned in media reports.

Musk says he and the board agreed he would approach Tesla’s largest shareholders, including Saudi Arabia’s sovereign wealth fund, about the plan. He says the Saudi fund has expressed interest since early 2017 about taking the carmaker private and did so again in a meeting on July 31.

In that meeting, Musk says, the Saudi fund’s managing director “strongly expressed” support for privatization. Musk says he left with “no question” that a deal with the fund could be closed. He says his tweet last week was an effort to inform all Tesla shareholders about the plan.