Aston Martin gets bids from private equity fund, Mahindra, reports say
Photo credit: MGM/Columbia Pictures/EON Productions
LONDON -- Aston Martin owner Investment Dar Co. has received competing bids from Investindustrial and Mahindra & Mahindra Ltd. for half the sports-car maker, people familiar with the matter told Bloomberg and Reuters.
Investment Dar and other Kuwaiti investors who own U.K.-based Aston Martin may choose a winner as early as this week, Reuters reported.
The buyer will get the stake as part of a capital increase, two of the people told Bloomberg.
Investindustrial, a European private-equity fund based in London, offered just under 250 million pounds ($401 million), the people told Bloomberg. Indian automaker Mahindra then trumped the offer with a higher bid, they said.
But much remains unclear as the talks continue.
"There are a lot of moving parts here," a person with direct knowledge of the matter told Reuters today, adding the Mahindras hoped to strike a deal this week.
The source told Reuters that an initial 40-percent stake could rise to 50 percent for a total price unlikely to top $400 million.
Kuwait's Investment Dar, which led a private acquisition of the luxury brand from Ford in 2007, denied on Sunday that it was reviewing two bids for 50 percent after sources said Mahindra had outbid InvestIndustrial. Other players in the talks have declined comment.
One person familiar with the deal told Reuters today that bidders were wrangling over issues on management control.
A decision would mark the end of a months-long search by Investment Dar to find an investor for Aston Martin, the maker of luxury sports cars featured in James Bond movies, people familiar with the matter said earlier this month. For Investment Dar, part of the group that bought Aston Martin from Ford Motor Co. for 503 million pounds ($805 million) in 2007, the proceeds would help the company pay off debt.
The winning bidder will get 50 percent of the voting rights and a 40 percent equity stake, one of the people said last week.
Investment Dar, the other Kuwaiti investors and Aston Martin management will retain the rest, the person said.
The talks were reported earlier last week by Private Equity News.
A new backer for the iconic British brand may help the maker of the 1.2-million-pound One-77 to boost volumes and develop cars that can challenge Volkswagen AG's Bentley and Fiat S.p.A.'s Ferrari. Investindustrial earlier this year sold Italian motorcycle maker Ducati Motor Holding SpA to Volkswagen AG's Audi brand.
Investindustrial's offer for Aston Martin includes plans to use technology and car parts from AMG, the Mercedes-Benz unit that makes sports cars, said two of the people. The buyout firm will invest in Aston Martin's existing models, and potentially add new vehicles, to attract buyers, they said.
An official at Daimler AG, which owns Mercedes, declined to comment.
While Aston Martin still gets engines from Ford, it lost access to Ford's other resources after the sale and remains the only global luxury brand that's not part of a larger auto group.
That independence could be a handicap with the auto industry under pressure to develop technologies to improve fuel efficiency. BMW is investing more than 1 billion euros ($1.3 billion) this year on making engines more efficient and developing electric vehicles. That sum exceeds Aston Martin's 2011 revenue of 507 million pounds.
The bulk of Aston Martin's lineup consists of two-door coupes like the DB9, Vanquish and Vantage. It also offers the Cygnet city car, which is based on Toyota Motor Corp.'s iQ.
Aston Martin vehicles have been featured in 11 James Bond movies, including the vintage silver DB5 in the latest one, "Skyfall."
The British carmaker's adjusted earnings before interest taxes, depreciation and amortization last year fell 18 percent to 76.2 million pounds, with deliveries steady at about 4,200 vehicles.
Bloomberg and Reuters contributed to this report.Contact Automotive News