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Aston Martin’s biggest investor considers adding to its 31% stake

Investindustrial is looking at buying another 3% stake, just nine months after it sold shares worth £450mln at the carmaker’s less-than-turbo charged IPO

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It’s not often private equity firms look to rebuild their stakes so soon after a company’s float

Aston Martin Lagonda Global Holdings PLC’s (LON:AML) biggest shareholder is considering buying another 3% stake, nine months after it pocketed hundreds of millions at the luxury carmaker’s initial public offering (IPO).

Italian private equity group Investindustrial, which owns 30.9% of Aston Martin’s stock, said it was weighing up a cash offer for another 6.84mln shares at 1,000p each.

READ: Aston Martin swings to a first-quarter loss as margins squeezed

Investindustrial said several other major shareholders, including Mercedes Benz owner Daimler, had given their backing to the possible offer.

The offer price is just 5p short of where the shares closed at on Friday afternoon, but it is nearly half the 1,900p they floated at back in October.

Back then, the investor trousered £450mln after selling a 10.4% stake in the company.

Aston Martin has been in reverse gear ever since it listed, though. Amid concerns it had been overvalued, the stock slumped on the first day of trading and is now down 47%.

The FTSE 250 group fell to a loss in 2018 after forking out a massive £136mln in IPO costs. It also recorded a loss in the first quarter of 2019 as higher costs hit the bottom line.

Investindustrial ‘must see significant long-term value’

Analysts said it was odd for private equity houses to look to rebuild stakes so soon after a company’s IPO.

“Private equity companies often use IPOs as a way of providing a partial exit for an investment,” said AJ Bell investment director Russ Mould. “Doing a U-turn and rebuying stock in the market is untypical behaviour.”

“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.

“A company like Aston Martin needs patient shareholders as its expansion plan is likely to require a fresh injection of cash in order to hit the growth goal.”

News that its largest shareholder is looking a topping up its stake put some steam back into the Aston Martin share price, which was up 1.7% to 1,021.6 on Monday morning.

Quick facts: Aston Martin Lagonda Global Holdings PLC

Price: 410 GBX

LSE:AML
Market: LSE
Market Cap: £934.81 m
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