Term Sheet — Monday, August 13

SOLVING THE TESLA PUZZLE

Good morning, Term Sheet readers.

BREAKING: Right as I was about to press “send” on this newsletter, I saw this: Elon Musk published an update on taking Tesla private.

In a Q&A style blog post, Musk answers questions such as “Why did I make a public announcement” and “why did I say ‘funding secured.’ In regards to the latter, he explains that Saudi Arabia’s Public Investment Fund (PIF) had approached him “multiple times about taking Tesla private” since the beginning of 2017. The two groups reportedly held several meetings over the next year to try to move forward with a going private transaction.

Musk adds, “Obviously, the Saudi sovereign fund has more than enough capital needed to execute on such a transaction.”

After the Saudi fund bought almost 5% of Tesla stock through the public markets, they reportedly reached out about another meeting. That meeting took place on July 31st, Musk writes.

After meeting with the managing director of the fund, Musk was led to believe that “no other decision makers were needed and that they were eager to proceed.”

“I left the July 31st meeting with no question that a deal with the Saudi sovereign fund could be closed, and that it was just a matter of getting the process moving,” he said. “This is why I referred to ‘funding secured’ in the August 7th announcement.

So this begs the question: Was funding actually secured?…Or did Musk just come away from the meeting with the belief/hope/idea that the PIF would invest without funding actually being secured? Not sure how the SEC will feel about all that.

Musk explains that the PIF’s managing director “has expressed support for proceeding subject to financial and other due diligence.” The director has also reportedly asked for additional details on how the company would be taken private, including any required percentages and any regulatory requirements.

And then it gets even murkier. Musk says he’s also having discussions with a number of other investors….Like someone aptly said on Twitter, “It’s not not the Saudis, basically.”

Musk also said he’s been reaching out to Tesla’s largest shareholders and that most of the capital required to take the company private will be funded by equity, rather than debt.

“The $ 420 buyout price would only be used for Tesla shareholders who do not remain with our company if it is private,” he wrote in the blog post. “My best estimate right now is that approximately two-thirds of shares owned by all current investors would roll over into a private Tesla.”

Over the last few weeks, several Term Sheet readers have e-mailed me with thoughts on what’s going on. I got everything from “Impossible to have lined up the financing to take this dog private!” to “End of the day, Musk is once again letting his ego and mouth take over and at some point it will cost him dearly — it is just a matter of time.”

But after all, it’s Elon Musk, we’re talking about. And with Elon Musk, it feels like everything is on the table at all times.

Read the full blog post here.

DEAL BUSTS: There has already been $ 540 billion in broken deals so far this year. Increased government scrutiny and investor activism are behind rise in failed blockbuster takeovers. Among the casualties are chipmaker Broadcom’s $ 142 billion hostile bid for rival Qualcomm, which was blocked by Donald Trump on national security grounds, and Qualcomm’s $ 44 billionn pursuit of NXP Semiconductors, which China refused to approve. Read more.

THE LATEST FROM FORTUNE…

[ts_bullet_primary] Blockchain for Identity: Too Good to Be True? (by Jeff John Roberts)

[ts_bullet_primary] Why Turkey’s Collapsing Currency Is Tainting World Markets (by David Meyer)

[ts_bullet_primary] Bitcoin Investing Is Creating Giant Tax Headaches for Hedge Funds

[ts_bullet_primary] Google’s Path Back Into China Includes a Host of Local Partners (by David Z. Morris)

VENTURE DEALS

[ts_bullet_primary] MyDreamPlus, a China-based workspace service brand, raised $ 120 million in Series C funding. Hillhouse Capital and General Atlantic co-led the round, and were joined by investors including JOY Capital, Ocean Link, M31 Management Fund of Giant Network Group, and K2VC.

[ts_bullet_primary] Mines, a San Mateo, Calif.-based fintech startup that has built a credit platform for emerging markets, raised $ 13 million in Series A funding. TPG Growth led the round.

[ts_bullet_primary] Appcues, a Boston-based software company, raised $ 10 million in Series A funding. Sierra Ventures led the round.

[ts_bullet_primary] Lyvly, a U.K.-based community platform that helps landlords and renters find and manage shared living accommodation, raised $ 4.6 million in Series A funding. The investor was Mosaic Ventures.

[ts_bullet_primary] SenSat, a U.K.-based tech company that simulates reality, raised 3.31 million pounds ($ 4.2 million) in seed funding. Investors include Force Over Mass, Round Hill Venture Partners and Zagm.

[ts_bullet_primary] Carepoynt, a Newport Beach, Calif.-based digital health startup, raised $ 2 million in seed funding. The investors were not named.

HEALTH AND LIFE SCIENCES DEALS

[ts_bullet_primary] Tot Biopharm, a China-based maker of anti-tumor drugs, raised $ 102 million in Series B funding. Investors include China Universal (Cayman) GP Limited, Center Laboratories Group, Vivo Capital, Chengwei Capital, Yuanta Financial Holdings Group and Cathay Capital.

[ts_bullet_primary] Artios Pharma Limited, a U.K.-based DNA damage response company developing treatments for cancer, raised $ 84 million in Series B funding. Andera Partners and LSP co-led the round, and was joined by investors including Pfizer Ventures, Novartis Venture Fund, Arix Bioscience, SV Health Investors, M Ventures, IP Group plcand AbbVie Ventures.

PRIVATE EQUITY DEALS

[ts_bullet_primary] KKR will acquire a 60% stake in Ramky Enviro Engineers Limited, a provider of environmental services and solutions in India and overseas, for approximately $ 530 million via a combination of primary and secondary investments valuing the company at an enterprise value of $ 925 million.

[ts_bullet_primary] ISA Fire and Security, a portfolio company of Align Capital Partners, merged with ABCO Fire Protection, a Lubbock, Texas-based provider of fire safety and security system inspection. Financial terms weren’t disclosed.

OTHER DEALS

[ts_bullet_primary] ACON Investments LLC agreed to buy Goody Products Inc, an Atlanta-based maker of hair styling tools. Financial terms weren’t disclosed. Newell Brands was the seller.

IPOs

[ts_bullet_primary] Gores Holdings III, a Beverly Hills, Calif.-based blank check company, filed for a $ 375 million IPO of 37.5 million units priced at $ 10 apiece. Gores Group backs the company. Deutsche Bank is underwriter in the deal. It plans to list on the Nasdaq as “GRSHU.” Read more.

[ts_bullet_primary] Weidai, a Hangzhou China-based car loan platform, filed for a $ 100 million IPO. The company posted revenue of $ 535.8 million in 2017 and earnings of $ 71.8 million. Morgan Stanley, Credit Suisse and Citi are underwriters. It plans to list on the NYSE as “WEI.” Read more.

EXITS

[ts_bullet_primary] Astellas Pharma acquired UK-based Quethera, a U.K.-based gene therapy company. Astellas may pay up to 85 million pounds ($ 108 million) to Quethera shareholders. Quethera was backed by UK Innovation and Science Seed Fund and Cambridge Enterprise.

[ts_bullet_primary] Rock Gate Partners agreed to sell Walpar, a Birmingham, Ala.-based provider of overhead sign structures, to Valmont. Financial terms weren’t disclosed.

PEOPLE

[ts_bullet_primary] Calen Angert and Nicholas Leppla have re-joined TA Associates as vice presidents.

[ts_bullet_primary] Richard Siege joined Sixpoint Partners as a vice president.

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Polina Marinova produces Term Sheet, and Lucinda Shen compiles the IPO news. Send deal announcements to Polina here and IPO news to Lucinda here.

Fortune

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Ancestry.com Sparks Outrage for Using the Term ‘Migrants’ to Describe African Slaves

An African American man identified as Andrew M. is blasting Ancestry.com for characterizing African slaves as “migrants.”

In a Care2 petition, Andrew says he and his brother were curious about their pedigree and submitted saliva samples to Ancestry.com, the largest for-profit genealogy company in the world, to get their DNA tested last year. “When we got the results we were excited to learn our history. The majority of our DNA came from Africa, that we expected, some came from Europe and surprisingly some came from Polynesia.”

However, he was even more surprised by the language that Ancestry.com used to describe the arrival of his black ancestors to America. “When zooming in on our African lineage from nations like Benin and the Ivory Coast, Ancestry.com suggested that our ancestors had arrived in the South during the ‘migration’ of the past few hundred years,” he wrote.

Andrew says he was “shocked and offended” to read Ancestry’s characterization of his family history. “Migration implies choice,” he explained, and “that is most certainly not what happened to my African ancestors who came here in the hull of a ship like chattel only to be sold into slavery when they arrived.”

Ancestry. com

A screenshot of the text in question on Ancestry. com

Now, he’s calling out Tim Sullivan, the CEO of Ancestry.com, and demanding that the site use more historically-accurate wording. “Slavery is an ugly fact of American history, but one with which we must reconcile honestly, not with euphemisms or kid gloves,” Andrew writes. “Ancestry.com is failing its customers if it cannot do so.”

He continued, “My European ancestors did, indeed, immigrate here. But the ones that came from Africa had an entirely different and more sinister experience. They were brought here by force, stolen from their homeland, shipped across the Atlantic ocean, and made to toil the fields of others.”

The petition, titled Ancestry.com Says My Ancestors Were Migrants, Not Slaves. Tell Ancestry.com Not to Sugarcoat History, has received over 10,000 signatures in support.

 

The post Ancestry.com Sparks Outrage for Using the Term ‘Migrants’ to Describe African Slaves appeared first on Black Enterprise.

Lifestyle | Black Enterprise

FASHION DEALS UPDATE:

Artist Ai Weiwei unfazed by China ending presidential term limits

SYDNEY (Reuters) – China’s removal of presidential term limits, effectively letting President Xi Jinping hold office for life, will have no impact on its culture, artist Ai Weiwei said on Monday, as he unveiled a giant artwork in Sydney depicting asylum seekers.


Reuters: Arts

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Trump pledged to revive the coal industry, but little has changed one year into his first term

U.S. coal output and exports ticked up in President Trump's first year in office, but employment barely budged.
Economy

ECONOMY NEWS UPDATE:

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The ongoing fight against term limits

Newsy

SPECIAL NEWS BULLETIN:

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CHARITY UPDATE:

Click today to request your free ACRX discount prescription card and save up to 80% off of your medicine!

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Please help American Consultants Rx achieve it’s biggest goal yet of donating over 30 million discount prescription cards to over 50k organizations in an effort to assist millions of Americans in need. Please click here to donate today!

Fed won’t need to raise interest rates in near term: Bullard

Fed can leave interest rates because inflation won't rise even if market improves, according to St. Louis Fed President.
Economy

ECONOMY NEWS UPDATE:

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Long Term Relationships Aren’t Exactly Good for Sexual Satisfaction, Apparently

For women, at least.

Lifestyle – Esquire

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