Reports about Aston Martin major shareholder Investment Dar looking to offload a stake in the British sports car maker in order to secure much-needed funds, have been circulating since early November.
Mahindra & Mahindra, which last year acquired Korean SUV maker SsangYong, was said to be the highest bidder. According to Bloomberg News, though, it seems that it has lost out to London-based equity firm Investindustrial.
Even though the exact stake remains unknown and a final agreement has not yet been signed, Aston Martin’s total value, including debt, has been estimated at around US$1.2 billion. Investment Dar currently has a 64 percent share in the company.
Investindustrial’s trump card was, most likely, the fact that its offer included using technology and parts from AMG, Mercedes-Benz’s performance division.
“An industrial owner would have been preferable to a financial owner” said Ashvin Chotai, managing director of Intelligence Automotive Asia in London. “Probably Mahindra could have provided a long-term commitment. That said, it was a trophy asset for Mahindra and would have required a lot of investment with very few synergies.”
Investindustrial sold Ducati to Audi earlier this year for €860 million (US$1.1 billion), so it has the cash to buy a stake in Aston Martin, which has seen its sales dip by 20 percent in the first nine months of the year.
Moreover, Moody’s Investor Services has given Aston Martin a “high credit risk” B3 rating. Moody’s also told Bloomber that, according to data released to bond investors on November 28, the carmaker had an operating loss of £3.6 million (US$5.8 million) and added that a new investor would have a “material positive” effect on its finances.
All parties involved declined to comment on the report, while The Times of India reported that Mahindra had retracted its offer.
By Andrew Tsaousis