Report: Saudi Arabia is looking to invest big in Tesla as the company teases going private - Business Insider

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Tesla opened its first Middle East showroom in Dubai last year. AP Photo/Kamran Jebreili

While Tesla CEO Elon Musk teased last week about taking the company private, several suitors may have already been courting the electric car giant months ago.

Saudi Arabia’s Public Investment Fund, the country’s sovereign wealth fund, is in talks with Tesla about becoming a significant investor as part of the move towards privatization, sources with knowledge of the fund’s plans told Bloomberg Sunday.

The Saudi investment fund approached Musk months ago to discuss acquiring a minority stake but was turned down as the company did not plan on issuing new shares at the time, a source close to the discussions told Bloomberg. In turn, the fund bought nearly $2 billion worth of Tesla shares on the market with the help of an investment bank, building up a stake just short of 5% in the company.

The fund has not yet made any concrete plans with Tesla on increasing its stake, sources told Bloomberg, but talks are ongoing, and continued investment in the company is seen as a strategic step toward diversifying the Saudi economy away from oil.

Last week, Musk stunned investors when he Tweeted about wanting to take Tesla private at $420 per share before issuing a formal statement on the company’s website. The company had a market capitalization of more than $60 billion last week.

In his statement, Musk said that taking the company private is “the best path forward,” and added that a shareholder vote must be held before a final decision is made. He later tweeted that investor support was already confirmed.

Tesla was reportedly courted by Japan’s SoftBank in April of last year, though sources told Bloomberg on Monday that the conglomerate isn’t planning to participate in deals for Tesla’s buyout as it has already vested interest in other auto makers and autonomous vehicle programs, like General Motors.

A Tesla investment would add to the Saudi fund’s long growing list of high-profile purchases. The company has invested $3.5 billion in Uber in June 2016, teamed up with Softbank for a $93 billion tech fund in May, and pledged to invest about $1 billion in Virgin Group’s space companies, Virgin Galactic in October.