Aston Martin's biggest shareholder to buy further 3% stake
Aston Martin Lagonda's biggest shareholder has offered to buy a further 3% stake in the luxury car maker.
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Strategic European Investment Group, a subsidiary of Italian private equity firm Investindustrial, wants to buy a stake of up to 3% at £10.00 per share but has to make an offer to shareholders as it already owns 31% of the company.
The shareholder had said earlier this month that it was considering buying more shares.
At 0930 BST, the shares were up 3.9% at 1,000.41p.
Since its IPO in October last year, Aston Martin shares have been on the decline and are currently down 21% year-to-date.
In a comment released at the start of the month when European Strategic Investment Group first signalled its interest in buying more shares, AJ Bell investment director Russ Mould said: "The normal practice for private equity companies is to buy assets low and sell them high. What’s slightly unusual is when they start to rebuild stakes soon after reducing the size of their investment. And that’s the situation now for Italian group Investindustrial which is in the market for more Aston Martin shares.
"Having sold some of its holding at the car manufacturer’s IPO last September at £19 a share, Investindustrial is now seeking to buy more shares, albeit at nearly half the price.
"Private equity companies often use IPOs as a way of providing a partial exit for an investment. They regularly do well at these stock market floats by getting a higher price than they originally paid to own all or part of a business privately. Doing a U-turn and rebuying stock in the market is untypical behaviour.
"Shares in Aston Martin have been falling since its IPO as investors didn’t like its large investment plans and questioned its aggressive growth strategy. Investindustrial must see significant long-term value in Aston Martin at the current price if it wants to buy up to 3% more of the business less than a year since it reduced its stake."