Shares of Britain’s Aston Martin Lagonda (GB:AML) defied the wider gloom in the auto sector on Monday, jumping by as much as 13% after the troubled luxury carmaker said it will raise more than £125 million ($161.7 million) through funding from Chairman Lawrence Stroll’s investment vehicle and the sale of a minority stake in the Formula One racing team.
Yew Tree Consortium, an investment vehicle led billionaire Stroll, is paying around £52.5 million to increase its stake in the British carmaker to around 33%, at a 7% premium to Friday’s closing price. At the same time the company will sell its minority investment in the Aston Martin Aramco Formula One Team to raise around £74 million.
Usually, when an investor crosses the 30% ownership threshold they are required to make an offer for the remaining shares – known in the UK as a Mandatory Offer. However, Aston Martin has asked for a waiver from the Panel on Takeovers and Mergers on this so Yew Tree does not need to make a Mandatory Offer for the rest of the company.
Through Yew Tree Stroll has invested around £600 million into Aston Martin since 2020.
“This proposed investment further underscores my conviction in this extraordinary brand, and commitment to ensuring Aston Martin has the strongest possible platform for creating long-term value while reducing equity dilution via this premium subscription, which should greatly reassure shareholders, as I again increase my long-term ownership in the company,” he said.
Since floating in 2018, AML stock has consistently disappointed investors with it falling over 98% since its IPO.
Is Aston Martin a Good Stock?
Analysts have a Hold consensus rating on AML stock, based on two Buys, two Holds and one Sell. The average AML price target of 137.00 implies about 93% upside.
