Kuwait-backed Aston Martin seeks Ferrari-like $6.7bn valuation in IPO

James Bond carmaker will sell a 25 percent stake at between 17.50 pounds and 22.50 pounds per share
Kuwait-backed Aston Martin seeks Ferrari-like $6.7bn valuation in IPO
Aston Martin shareholders are cashing out months before the UK leaves the European Union.
By Bloomberg
Thu 20 Sep 2018 12:07 PM

Aston Martin filed for an IPO in London that would value the maker of luxury sports cars as high as 5.1 billion pounds ($6.7 billion), seeking a multiple that would approach rival Ferrari NV.

The James Bond carmaker will sell a 25 percent stake at between 17.50 pounds and 22.50 pounds per share, it said Thursday in a statement. Trading will begin on the London Stock Exchange in October.

Aston Martin shareholders are cashing out months before the UK leaves the European Union.

While the UK’s post-Brexit automotive industry is one of the sectors most exposed to potential trade hurdles, the split wasn’t a large factor in the IPO calculations, chief financial officer Mark Wilson has said. Aston Martin is controlled by investors including London-based Investindustrial Advisors Ltd.

One question is whether a niche manufacturer like Aston Martin can deliver for investors like Ferrari, which trades at about 20.5 times its expected adjusted Ebitda for 2018, according to Bloomberg data.

Aston Martin’s proposed price range of 4.02 billion to 5.07 billion pounds would put the British carmaker in a similar range, but analysts are sceptical.

“We love the brand. We respect the management team. But we simply can’t see how a Ferrari multiple looks realistic," Max Warburton, an analyst at Sanford C. Bernstein & Co., said in a research note.

“They are selling a business that is loss making on a US GAAP basis, with a weak profitability record and a fragile balance sheet, selling cars at much lower price points, to a much less dedicated audience.”

Daimler AG will convert its holding of about 4.9 percent to ordinary shares.

Kuwait-based ADEEM, a family investment house, has a 11.04% stake in Aston Martin Group, while Kuwait’s Investment Dar holds a 2.48% stake. Tejara Capital, an investment banking, advisory and asset management services firm with offices in Dubai and London, has a 4.72%. It’s part of International Oasis Holding group, a Kuwait-based conglomerate with interests in oil and gas  sector, cement industrial,  steel industrial, construction sectors.

*Additional reporting by Arabian Business.

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