Tesla CEO Elon Musk has confirmed that he has enlisted the services of Goldman Sachs and Silver Lake as he looks to press forward with plans to take Tesla private.
Following a statement on his blog early on Monday saying that he was approached by investors from the Saudi Arabia sovereign wealth fund as early as last year, he released a statement via Twitter to confirm that he is working with Goldman Sachs and Silver Lake as financial advisors to help make the private option a reality.
In the interests of maintaining a “broad investor base”, Musk is also looking to include other investors and is seemingly in talks with other as-yet-undisclosed parties.
Musk confirmed that he has also enlisted several law firms to provide advice, including Wachtell, Lipton, Rosen & Katz (WLRK) and Munger and Tolles & Olson (MTO). None of the firms mentioned have replied to any questions thus far.
While Goldman Sachs has long been an advisor to Elon Musk and Tesla, Silver Lake is a private equity investment company that specializes in working with the tech industry.
According to a source quoted by news agency Reuters, a senior figure from Silver Lake said that the company would not be involved in the investment side of things and is merely providing “assistance to Musk without compensation”. Silver Lake has “not been hired as a financial advisor in an official capacity”.
Musk has not offered many details since confirming his intentions to take Tesla private last week, and yesterday’s news that talks have been taking place with Saudi Arabian representatives may raise as many questions as it answers. Musk said that there is “funding secured” following new talks at the end of last month, and he is now taking everything forward as quickly as possible.
A key measure that Musk wants to keep concrete no matter the outcome of private investment talks involves securing confirmation of how this would affect current public investors, whom he said could still hold onto their shares following the sale of some assets. A specific number must be able to keep their shares for the plan to work.
“A range of potential structures and options” are now under scrutiny, Musk said, as he explores various possibilities to secure capital from different areas and diversify the asset as much as possible, thereby reducing some of the risks that have been unnerving investors in recent months. Musk also said that it would be premature to release full details at this stage, although all investors would see them at the appropriate time.
Despite Musk saying that Tesla’s board has fully agreed to look at the idea of going private, the New York Times reported late on Monday that the Board of Directors was “blindsided” by Musk’s public tweet confirming his intentions.
Sources said that his tweet came out “with little forethought” and “had not been cleared ahead of time with the company board”. Musk, who is known for going off his own steam and not waiting for advice before doing what he thinks is right for Tesla, is likely to face some backlash from the Board of Directors for his actions.
As Musk allegedly described himself as “not the kind of person who could hold things in,” there is some worry that this “impulsive” act could see an incoming investigation from the Securities and Exchange Commission.