Aston Martin Reportedly Hiring Banks To Float $6b IPO

Aston Martin looks to be getting closer to floating an initial public offering on the stock exchange. The British automaker has been rumored to be pursuing an IPO for the past few years. But now Reuters reports that it’s preparing to hire three major banking firms to handle the initiative, indicating that the move could be coming up soon.

The capital raised by an IPO would ostensibly help the company fund major investments it has under way. For one, it’s building a new factory in Wales. That’s where it will build the new DBX crossover (or whatever it’s ultimately called).

For another, it’s preparing to relaunch the Lagonda brand as a high-end electric vehicle manufacturer, delving into new territory for the automaker. It’s also contemplating a venture into Formula One as an engine supplier, likely for its close partner Red Bull Racing.

These in addition to the rollout of new models to replace its aging lineup. It recently introduced the new DB11 and Vantage. A successor to the current Vanquish could be next. The Rapide is growing long in the tooth. And it’s also working to bring the Valkyrie hypercar to market, with another mid-engined supercar to slot in underneath it.

The hundred-year-old company is currently owned by Italian private equity fund Investindustrial and a consortium of other investors (principally from Kuwait). Each would likely give up a portion of its shares in return for a proportion of the funds generated by the stock issue.

Following Ferrari’s Lead

Aston Martin Lagonda Limited (as the company is officially incorporated) wouldn’t be the first exotic automaker to float an IPO. Ferrari separated from parent company Fiat in 2015 and floated shares on the New York Stock Exchange under the handle RACE.

The Volkswagen Group owns several more of Aston’s rivals, including Porsche, Lamborghini, Bugatti, and Bentley. McLaren is owned by a pair of Middle Eastern investors (from Bahrain and Saudi Arabia). Maserati remains part of the Fiat Chrysler group of which Ferrari was once part. And Jaguar is owned by Indian automaker Tata.

According to the report, the Aston Martin IPO would be handled by Deutsche Bank, Goldman Sachs, and JPMorgan. The latter is one of the many underwriters of Ferrari’s IPO, along with Santander, UBS, BNP Paribas, Mediobanca, and Allen & Company LLC. Aston’s IPO is estimated to be worth between four and five billion pounds, or roughly $5.6 to 7 billion in equivalent American funds – far more than previously thought.

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  • SteersUright

    Aston will never be Ferrari or Lambo for that matter. Only a fool would buy into this IPO, especially with the flavor-of-the-moment design language they’ve recently adopted and loss of characterful, melodious engines. I dont see much long-term value in this brand without major private investment and better management first.

    • Joff

      I’m afraid I would beg to differ. An Aston will 90% of the time look better than a Lambo. And be a better investment
      10 Cents worth

    • I disagree, new Aston has shown massive improvement and stability, not to mention they will have strong line up for few decades. That is why Palmer called his plan “Next Century” he vowed not to make Aston Martin bankrupt again.

      • SteersUright

        Exotic cars are and always will exist in a fickle marketplace. Their volumes are generally low and vulnerable to economic conditions in a way that mainstream manufacturers weather far better. Ferrari has become such an iconic mega-brand it has managed to rise above in a manner that perhaps only Porsche has as well (admittedly not as exotic). Aston is only beginning to show signs of life and their current design language, build quality (see youtube reviews of Vantage), small volume, would give me zero confidence as a long-term investment. They are a brand that can at once, in a downturn, vanish, despite their temporary momentum. Yes, temporary and only recently at that. Also, in a marketplace where every purveyor of high end goods seems to be doing well I might add.

        That said, if you think differently, by all means write them a check!

        • Ferrari wasn’t born with silver spoon either, there was a time when Ferrari made badly crafted, relatively slow cars. Even under Fiat care, Ferrari once almost in the verge of bankruptcy. So does the Porsche, if it wasn’t for Peter Schutz diversification, Porsche won’t be alive today. This is just a comparison on what AML is today, and Aston Martin has one of the biggest name in the market, thinking of James Bond? You must think of Aston Martin. So they ticks all the boxes, heritage and name, strong line up and future plan, quality and customer service.

    • You do realise that’s an assertive opinion investors really don’t care about? As ArcherOnCars pointed out, the stronger line-up, Lagonda and their financial stability all echo the idea of ‘printing money’. It’s that what they’re after. Due to being more bespoke than what Lamborghini are, it really is a two horse race between themselves and Ferrari. Being independent companies also help that factor of desirability to investors.

      • SteersUright

        Your well written response gives me great confidence in your investment advice. My money will remain in my account. But you, by all means, can and should open your pocketbook and be excited by Aston’s forthcoming IPO.

    • smartacus

      Agreed. This is one IPO to stay away from.
      They are so unstable and unbespoke they
      had to sign an agreement with AMG for engines.

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