By David Marcus
Elon Musk pronounced himself "excited to work with Silver Lake and Goldman Sachs as financial advisor ... on the proposal to take Tesla (TSLA) private" in one of his latest tweets. But there's one problem -- Silver Lake Partners isn't an investment bank.
Yes, Silver Lake is perhaps the world's leading technology-focused private-equity firm. It backed Michael Dell when he took Dell Inc. private in 2013, as well and when Dell paid $67 billion for EMC Corp. in 2016. It's also worked for years with Hock Tan, now the CEO of Broadcom Inc. (AVGO) And in 2011, Silver Lake led a group of investors who bought a $1.6 billion stake in Chinese search engine Alibaba Group Holding Ltd. three years before its IPO.
But that doesn't make Silver Lake a "financial advisor," and it seems unlikely that Musk went to Silver Lake for financial advice. Instead, he probably sought the private-equity giant's participation in a Tesla buyout, which would be around the size of the EMC deal.
However, Reuters reported that a source familiar with the matter said that Silver Lake was merely "offering its assistance to Musk in his exploration of a deal without compensation, and had not been hired as a financial adviser in an official capacity." The source added that Silver Lake, which didn't respond to a request from TheStreet for comment, "is not currently discussing participating in the potential Tesla deal as an investor."
In other words, Musk's reference to Silver Lake as an "advisor" suggests, perhaps inadvertently, that the buyout shop isn't itself interested in Tesla. And if one of the world's top technology-focused private-equity funds isn't interested, why should anyone else be?
(Marcus is a senior writer for TheDeal.com, our sister publication that covers mergers and acquisitions.)