Aston Martin shares in London soared as much as 13% after the British sports car maker announced it would raise at least £125 million ($162 million) through a share sale to Canadian billionaire Lawrence Stroll's investment vehicle and by selling a minority stake in its Formula One racing team.
Bloomberg reported that Stroll's Yew Tree Consortium plans to increase its stake in the struggling British luxury sports car maker to 33% from about 27.7%. The deal will provide Aston Martin with about £52.5 million. The new shares were priced at 70 pence apiece to Friday's closing price.
Aston Martin CEO Adrian Hallmark released a statement stating, "This renewed support from Lawrence and his Yew Tree Consortium partners underlines their immense confidence in our team and the future of the Company."
"By strengthening the balance sheet, this investment provides additional headroom to support our future product innovation and business transformation activities, which combined, will accelerate our progress into being a sustainably profitable company," Hallmark added.
Aston Martin also plans to sell a minority stake in the Formula One team that bears its name and raise an additional £74 million. The buyer was not disclosed. Stroll controls the racing team independently.
The latest financial outlook from the sports car maker signaled lower volume guidance for 2025, citing trade wars and tariffs. The company now expects "modest growth," down from its previous target of mid-single-digit percentage growth. CEO Adrian Hallmark had already lowered the profit target for 2025 and slashed 170 jobs—about 5% of the workforce.
Under British takeover rules, Stroll's Yew Tree Consortium would be required to bid for all of Aston Martin. However, AFP News noted, "Yew is asking for this to be waived."
"Exemptions have been granted in the past, yet it feels like a takeover would be a better outcome as it would mean the car company would be free to pursue a turnaround strategy out of the public spotlight," AJ Bell investment director Russ Mould wrote in a note.
Aston Martin has turned to investors multiple times, but with repeated profit warnings, a struggling race team, and now the impact of trade wars, the company has yet to initiate a meaningful turnaround strategy.
