Prepare for an IPO if automaker decides to go that route

Aston Martin’s reemergence as a force in the auto industry has the company thinking big. It’s not big in the sense of a new supercar or hypercar. It’s big in the sense of floating the company on the stock market. According to Reuters, Aston Martin’s major shareholders, Italian private equity fund Investindustrial and a group of Kuwaiti investors, are looking to cash in on the brand’s rising sales. Investment bank Lazard has been brought in to work on a preliminary plan that could either result in an initial public offering (IPO) or a trade sale to a separate automaker.

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Investment bank Lazard has been brought in to work on a preliminary plan that could either result in an initial public offering (IPO) or a trade sale to a separate automaker

This is what happens when business is booming. Opportunities open that aren’t there when a company is struggling. In Aston Martin’s case, floating the company on the stock market could yield a lot of gains for the British automaker, particularly Investindustrial, which acquired a 37.5 percent stake in the company back in 2013 for £150 million. According to Reuters, the Italian investment firm is the driving force behind the idea to float the company on the stock market. That makes a lot of sense because Investindustrial could recoup all of its investment in Aston Martin and still have a huge chunk of Aston Martin’s shares under its ownership. Isn’t that the whole point of investing? You put your money in and hope the company grows to the point that you get your investment back and still control a significant share of the brand’s ownership structure.

The company could decide against a stock market float if it determines that the timing isn’t right to have one

Granted, no decision has been made on whether Aston Martin will take this route. The same report indicates that the company could decide against a stock market float if it determines that the timing isn’t right to have one. Be that as it may, a move to float Aston Martin on the stock market isn’t a new thing in the industry. Ferrari did the same back in 2015 when it separated from parent firm Fiat Chrysler Automobile.

Whatever Aston Martin decides, this issue is a good one to have. The British automaker has seen first-hand what it looks like to be a struggling automaker. Now that its fortunes have turned, it deserves to reap the rewards from all of its hard work.

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Source: Reuters

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