Aston Martin accelerates its IPO up to $ 6.7 billion

In an interview, the chief executive told the Wall Street Journal that the ambitious prices reflected the value he had created by revising the company's range of models and bringing the automaker back to profitability.

"It's one of the most dramatic recovery stories of the automotive industry," said Mr. Palmer. "It's pretty impressive, but we're only halfway down the track. We still have a long way to go.

Palmer and CFO Mark Wilson confidently presented the tiny Aston Martin as a luxury brand that can compete with the larger, more prosperous Ferrari in terms of profitability and market capitalization.

But some analysts are skeptical about the duo's ability to deliver a Ferrari in Aston Martin clothing.

"We view Aston's financial services as fragile, the underfunded balance sheet and the path to high uncertain profitability," said Max Warburton, an automotive analyst at Bernstein Research, a broker, in a note to his clients Thursday.

"We believe that prices and margins will remain structurally much lower than Ferrari's, more volatile profitability and the company will face greater risk during a recession."

Aston Martin said it would offer shares between 1,750 and 2,250 pence each, valuing the luxury car maker between 4.02 and 5.07 billion pounds ($ 5.29 billion and $ 6.66 billion) .

The Company expects to hold 56.8 million shares, representing a 25% interest, which will come entirely from sales by existing shareholders. There will be an over-allotment option of up to 10% of the scheduled bid.

The final price of the agreement should be announced on October 3rd. Aston Martin shares will be admitted to the

London Stock Exchange

October 8th.

According to Arndt Ellinghorst, automotive analyst at Evercore ISI, a London-based brokerage firm, prices are at the peak of expectations and require a "high level of confidence" in the company's ability to achieve its dynamic growth strategy. Mr Ellinghorst suggested that a price in the middle of the range would be more realistic.

"It remains to be seen if Aston Martin can execute," he said in a note to his customers.

Ford Motor
Co.

Aston Martin was sold in 2007 for about $ 925 million to a group of investors, including British mogul David Richards. In 2012, a consortium of shareholders led by the UK-registered investor Investindustrial took a substantial stake in the company, valuing its capital at £ 975 million, or approximately $ 1.3 billion at the end of the year. current exchange rates.

Kuwaiti investors Primewagon, Asmar and Adeem hold approximately 57% of the voting shares, while Investindustrial holds approximately 38%. German car manufacturer

Daimler
AG

, which holds non-voting shares equal to 4.9% of the common shares, will maintain its interest.

Aston Martin reported an 8% increase in revenue at June 30 to £ 444.9 million and a 14% increase in earnings before interest, taxes, depreciation and amortization to £ 105.9 million.

Palmer sees the list as a stepping stone to future growth. The company plans to launch a new model each year over the next seven years and increase production to more than 10,000 vehicles per year over the medium term. Production is expected to reach about 6,400 cars this year.

Palmer's and Aston Martin's investors hope the post-listing company will be able to replicate the race its rival Ferrari has enjoyed since its introduction in New York in 2015. Ferrari trades at a multiple of around 18 earnings before interest, taxes, depreciation and amortization, not far from the valuations of luxury groups such as Hermes.

Despite its recovery, analysts believe that Aston Martin still has a long way to go before it can compete with Ferrari performance. Ferrari produces almost twice as many cars as Aston Martin and is considerably more profitable.

There is also no guarantee that Aston Martin will be able to nearly double its production and sales over the next three years with the introduction of new SUVs and sedans at a time when brands rival luxury flood the market with their own models The economy is shrinking in the light of trade tensions.

Write to William Boston at [email protected]