Aston Martin's biggest shareholder could buy further 3% stake

Strategic European Investment Group - a subsidiary of Italian private equity firm Investindustrial - is considering buying up to a 3% stake in the company worth £68m.

The investment group, which already owns 31% of Aston Martin, would buy the shares at £10 each.

"This announcement does not amount to an announcement of a firm intention to make an offer and there can be no certainty that an offer will be made," it said, adding that a further announcement will be made as and when appropriate.

At 1010 BST, the shares were up 1.5% at 1,019.80p.

Russ Mould, investment director at AJ Bell, said: "The normal practice for private equity companies is to buy assets low and sell them high. What’s slightly unusual is when they start to rebuild stakes soon after reducing the size of their investment. And that’s the situation now for Italian group Investindustrial which is in the market for more Aston Martin shares.

“Having sold some of its holding at the car manufacturer’s IPO last September at £19 a share, Investindustrial is now seeking to buy more shares, albeit at nearly half the price.

"Private equity companies often use IPOs as a way of providing a partial exit for an investment. They regularly do well at these stock market floats by getting a higher price than they originally paid to own all or part of a business privately. Doing a U-turn and rebuying stock in the market is untypical behaviour.

"Shares in Aston Martin have been falling since its IPO as investors didn’t like its large investment plans and questioned its aggressive growth strategy. Investindustrial must see significant long-term value in Aston Martin at the current price if it wants to buy up to 3% more of the business less than a year since it reduced its stake.

"A company like Aston Martin needs patient shareholders as its expansion plan is likely to require a fresh injection of cash in order to hit the growth goal. And the fact that it has gone bankrupt seven times in its history illustrates how volatile Aston Martin’s growth path has been."