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Fred Dunkley

Fred Dunkley

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Fred Dunkley is a tech analyst, writer, and seasoned investor. Fred has years of experience covering global markets and geopolitics. 

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Aston Martin Challenges Rolls Royce Ahead Of Possible IPO

Bond

Few cars are as iconic as the Aston Martin, immortalized by James Bond and still driven today by the most recent 007, Daniel Craig. Now, the British carmaker is considering a potential IPO with a value of up to $6.8 billion—and it’s taking on Rolls Royce for good measure.

Aston Martin’s next big move, possibly to an IPO, isn’t going to go down without another big challenge: After years of peaceful coexistence with its key rival, Aston Martin has just announced it will compete directly with Rolls Royce via the relaunch of its electric Lagonda, which it unveiled at the Geneva Motor Show.

With 007 confidence, Aston went as far as to call Rolls Royce “Ancient Greece”, setting itself up to be the future of luxury.

It’s a daring potential entrance into the IPO world.

Jointly owned by Italian and Kuwaiti shareholders, an IPO isn’t the only option for Aston Martin, which is said to be considering “a range of strategic options for the future of the group”.

Investment bank Lazard has been hired to work out a preliminary plan, according to Reuters, and there could end up being an IPO in the third or fourth quarter of this year, or a trade sale. 

In the event of an IPO, both London and New York are in the running, according to sources cited by British media.

The potential $6.8 billion price tag follows promising 2017 earnings reports. Last year, Aston Martin managed to sell more cars than it had in nine years. It’s $150,000 Vantage model almost sold out of its production capacity for 2018. 

Sales hit a record $1.2 billion, a 48-percent gain over the previous year. Related: Flying Homes And Floating Cities: How Billionaires Travel

Earnings before interest, taxes, depreciation, and amortization were reported as at least $243.7 million, with the full earnings report set to be released later this month.

In the meantime, James Bond could end up driving an SUV.

One plan being considered is an Aston Martin expansion into SUVs, which could begin production by 2019 at its new factory in Wales.

Everyone will be also looking to Ferrari for a hint of how an Aston Martin IPO might unfold. Ferrari went public in late 2015 on the NYSE—and its shares have more than doubled since.

But can Aston Martin successfully take on its luxury competitors now that it’s drawn the battle lines so definitively, breaking the peace?

Speaking to the Financial Times, Jeffries car analyst Philippe Houchois said the Lagonda will raise Aston’s value ahead of a potential listing: “With Lagonda, they are going right after Bentley and Rolls-Royce. But those customers are not necessarily married to a brand. Ferrari buyers often have an Aston as well.”

By Fred Dunkley for Safehaven.com

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