Aston Martin shares jump after Stroll’s consortium increases stake
- Lawrence Stroll’s Yew Tree Consortium now has a total shareholding of 26.2%
- Aston Martin Lagonda shares are still far below their initial public offering price
- Geely and the Public Investment Fund are also major Aston Martin investors
Aston Martin Lagonda shares soared on Friday after its largest shareholder upped its stake in the luxury brand.
Lawrence Stroll’s Yew Tree Consortium has agreed to purchase another 26million ordinary shares in the business, giving it a total holding of 26.23 per cent.
Following the update, Aston Martin’s share price became the FTSE 250’s second-highest riser, jumping 13.2 per cent, or 34.4p, to 295.4p by early Friday afternoon.
New investment: Aston Martin Lagonda shares soared on Friday after Lawrence Stroll’s Yew Tree Consortium was revealed to have increased its stake in the carmaker
However, they remain significantly down on their initial public offering price due to the automotive manufacturer suffering plunging sales and production cutbacks during the Covid-19 pandemic.
It has also been impacted by supply chain problems delaying the delivery of vehicles to the Americas region and a series of poor financial results.
The Warwickshire-based firm reported pre-tax operating losses more than doubled to £527.7million in 2022 due partly to new product launches and increasing debt and inventory costs.
But in its latest half-year results, Aston Martin revealed losses halved thanks to higher average selling prices and strong demand for its DBX707 sports utility vehicle and limited edition V12 Vantage Roadster.
Stroll said the latest decision to boost the consortium’s stake was indicative of its ‘continuing confidence and belief in the future of Aston Martin.’
He added: ‘We have rebuilt this iconic company, transforming it into an ultra-luxury brand, with a portfolio of highly desirable, performance-driven cars.
‘This increased investment demonstrates our continuing, long-term commitment to the company, our conviction for the future and the shareholder value the company will deliver.’
The Canadian billionaire’s group first invested in the struggling firm three years ago when it bought a 16.7 per cent stake as part of a £500million rescue package.
Two years later, Chinese conglomerate Geely – the owner of Volvo and Lotus cars – and Saudi Arabia’s sovereign wealth fund – the Public Investment Fund – came on board after Aston Martin launched a £653million capital raising with the aim of reduce its high debt pile and funding spending on electric vehicles.
Geely became the third-largest shareholder in May under an agreement to supply technology and components to the carmaker, leading to speculation that it might attempt another takeover bid.
Russ Mould, investment director at AJ Bell, said Stroll’s consortium move to boost its stake means it could be considering its own acquisition approach.
He wrote: ‘When an investor already owning more than 20 per cent of a business increases their stake, it sends a major signal to the market that something big could happen.
‘It could mean one of three things: either they intend to make a takeover bid at some point in the future, trading is going very well so they believe the company will soon be worth a lot more, or the shares are stuck in the mud and they see an opportunity to buy more of them while the market isn’t interested.’
