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Abu Dhabi, UAEWednesday 19 September 2018

Elon Musk hires Morgan Stanley to help take Tesla private

By adding Morgan Stanley to Goldman Sachs, Musk has tied up the top two merger advisers in the US

Morgan Stanley and Goldman Sachs have longstanding ties to Mr Musk AP
Morgan Stanley and Goldman Sachs have longstanding ties to Mr Musk AP

Elon Musk has hired Morgan Stanley to assist him in his potential bid to take Tesla Inc. private, according to a person familiar with the matter.

Morgan Stanley is advising Mr Musk, not the company, its board or a special board committee formed to evaluate a potential take-private proposal, said the person, who asked not to be identified because the matter is private. The bank suspended coverage of the stock on Tuesday without explanation.

Mr Musk, 47, shocked the financial world August 7 when the chief executive officer tweeted that he wanted to take the electric-car maker private and had “funding secured”. In a blog post, he later indicated that no such financing deal had been closed. The tweet has drawn a subpoena from the Securities and Exchange Commission, according to a person familiar with the matter.

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By adding Morgan Stanley to Goldman Sachs, Musk has tied up the top two merger advisers in the US this year. Both banks have been lead underwriters on most of the company’s stock and convertible debt offerings. Morgan Stanley is among Tesla’s 20 largest shareholders, with a 0.6 percent stake. Its Tesla analyst, Adam Jonas, has historically been one of the more bullish researchers of the stock.

The Palo Alto, California-based automaker didn’t immediately respond to a request for comment. A spokesman for Morgan Stanley declined to comment.

Tesla shares were little changed at $321.15 at 2.39PM (EST). After a roller coaster month in which they soared to almost $380 before falling back below $300, they are up 3.3 percent this year, best among US automakers.

Morgan Stanley and Goldman Sachs have longstanding ties to Mr Musk, who is also CEO of Space Exploration Technologies Corp. as well as Tesla’s chairman and largest shareholder. As of February 2017, Mr Musk owed Morgan Stanley $344.4 million in personal loans backed by his Tesla shares.

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