By Dave Leggett - 27 November 2012 15:48
It's gone very quiet on the Aston Martin story. Negotiations may well be at a delicate stage. There may well be a fair bit to sort out. The current owner isn't going to flog and run, it will still have a significant stake.
Sounds to me like Investindustrial sensed a good opportunity for an investment with decent return potential, word going around for months now that Investment Dar would talk to bidders for a big stake. Aston Martin does not sell many cars, does it? Get in there and secure a technical tie-up with an appropriate partner (Daimler/Mercedes by sounds of it) to help with new models and it's a brand 'with legs' perhaps. Premium brands are doing rather well aren't they? Look at BMW, JLR. Aston Martin could surely do better than circa 4K sales a year and could be worth a lot more in 5 years' time if all goes well? The Kuwaiti investment group that owns it also wants some cash, so it may well be, the money men were probably thinking in Lugano, a 'buyer's market' for a car brand like that, right now. Just the involvement of Investindustrial - a private-equity group that styles itself as going where others fear to tread - might send the message that Aston Martin is not an easy sell. Investment Dar would have to take what they can get. Deal almost done late last week.
And then, along comes Mahindra with a bigger bid. Investment Dar likes the sound of that. World's biggest tractor company wants to make luxury sports cars, where are the synergies, the analysts say? They perhaps have some different motivations and a different approach to making it work. Think Tata and JLR, think Geely and Volvo Car. Emerging market companies propelled to the world stage. They leave the precious brands alone but 'manage the bottom lines', protect the asset, get management and worker support for long-term strategies. Immediate shake-ups cause damage, send confused messages. Anyway, my feeling is that we'll know the outcome of the sensitive discussions taking place this week very soon.
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