British car making legend Aston Martin is targeting a £5 billion valuation when its shares begin trading on the London Stock Exchange next month.
The price range for the company’s London listing was today revealed to be between £17.50 and £22.50 per ordinary share, as it looks to emulate Italian rival Ferrari’s successful New York float.
It means that Aston Martin, widely recognised as James Bond’s favoured sports car maker, would be worth between £4.02 billion and £5.07 billion.
With a market cap of that size, the company would be at the top end of the FTSE 250, making it around the same size as Marks and Spencer, Severn Trent, or Royal Mail.
Aston Martin will be the only automotive company listed on the London Stock Exchange
Based on a mid-level pricing of £20, and an average selling price of Aston Martin’s main models of £150,000 in 2017, investors could buy 7,500 shares for the price of one of its typical cars.
Shares are due to start conditional trading on the London Stock Exchange on or around October 3, which is when the final pricing of the Initial Public Offering (IPO) is expected to be announced.
Unconditional trading will then begin around October 8.
Private investors are unable to buy into the car maker in the IPO and must wait until shares start trading second hand.
Aston Martin said it was offering to float roughly 57 million shares, representing 25 per cent of the business.
Those shares will come from existing shareholders, including Adeem Investments, Primwagon, Investindustrial and senior management.
Cars vs shares
Aston Martin investors could buy 7,500 shares for the £150,000 price of one of its typical cars.
Daimler AG of Germany will not sell down its holding at the IPO and will remain a stakeholder, Aston Martin said.
The company will convert its current non-voting stake of 4.9 per cent to shares instead.
Institutional investors are being targeted by the IPO, as are Aston Martin employees, customers and its Owners Club members in the UK.
Hargreaves Lansdown confirmed that there was already a high level of interest from investors, with over 40,000 retail investors having already signed up for updates on Aston Martin through the company’s IPO information service.
Popular: The James Bond films have made the luxury carmaker a household name
‘Aston Martin has a chequered past, having gone bust seven times in its 105 year history, though recent performance seems to be turning a corner’, said Hargreaves’ Laith Khalaf.
‘The luxury car maker is looking to ramp up production, expanding into the SUV market and building its presence in China.
‘The key to success will be increasing the number of models on the road while maintaining the exclusivity of the brand. On that front, having the world’s most famous fictional spy as a brand ambassador is an asset most marketing departments can only dream of.’
However, he cautioned that investors should not get carried away by a love of the brand and should instead keep a cool head when evaluating its prospects.
He said: ‘It’s important for potential investors to concentrate on the company’s long term financial prospects and not to get carried away by the brand however.
‘That means having a thorough read of all relevant information the company is producing as part of its float, and only investing if they are happy with all the risks involved.
‘When Ferrari listed on the stock market is was priced at $52 per share. The share price faltered in the first five months, falling by around 38 per cent.
‘It has since rallied to around $135, though this serves to highlight that just because a well-known brand launches on the market, share price movement on flotation is always a two way street.’
Rare models prove a money-spinner
What the final DB4 GT Zagato Continuation models will look like when they’re delivered to customers in 2019 – one year before the DBS GT Zagato is ready for collection
For luxury car makers the game has moved on from simply producing £100,000-plus models.
A profitable seam being mined by many is producing ultra-exclusive cars that can cost more than £1million, due to their seriously limited numbers.
Aston Martin has revealed its latest endeavour in this arena – a partnership with famous Italian coachbuilder Zagato, with which it shares a long history of producing rare cars.
Some 58 years after the brands first teamed-up, they’ve committed to making a DB4 GT Zagato Continuation based on the 1960s original and an all-new modern DBS GT Zagato – a rebodied version of Aston’s recently-launched DBS Superleggera.
Just 19 of each will be made. And there’s one huge proviso if you’re interested – you have to buy them as a pair for a combined £7.2million. Read the full Aston Martin and Zagato story.
Aston Martin ended long-standing speculation last month about its plans to go public by confirming it was exploring plans to float on the London Stock Exchange.
Former Royal Bank of Scotland director Penny Hughes was later appointed as its new chairman, with plans for her to join the board after the carmaker’s IPO.
Andy Palmer, Aston Martin’s president and group chief executive, said: ‘By becoming the only automotive company listed on the London Stock Exchange, Aston Martin Lagonda will provide investors with a fitting opportunity to participate in our future success.
‘Our Second Century Plan gives prospective investors deep insight into how we have executed our turnaround and how we are positioned for growth.’
The company has had a turnaround in the last four years, investing in manufacturing and engineering as well as creating thousands of jobs in the West Midlands and South Wales, which Mr Palmer said has had a ‘profound’ effect on the UK economy.
‘This track record has created significant interest in the Aston Martin Lagonda offer, and we are pleased to offer shares not only to institutional investors but also to our eligible UK resident employees, customers and members of the Aston Martin Owners Club,’ he added.
Andy Palmer has been the CEO of Aston Martin since 2014. The company has gone through a turnaround in the last four years by investing in manufacturing and engineering.
A host of new directorships have also be announced by the company including former InterContinental Hotels Group chief executive Richard Solomons and former William Hill and Mothercare board member Imelda Walsh.
The carmaker was founded in London in 1913 and has its headquarters in Gaydon.
It also has other facilities in Wellesbourne, where it produces its special edition models, as well as Newport Pagnell, where its heritage models are manufactured.