RE: Takeover rumours don't spoil Aston Martin's party

RE: Takeover rumours don't spoil Aston Martin's party

Monday 9th December 2019

Takeover rumours don't spoil Aston Martin's party

PH gets to ask the Aston boss some awkward questions at St. Athan opening



There's a fine line between good news and bad, and one that can sometimes be spun either way. The fact a news article about Lawrence Stroll considering a bid to take a major stake in Aston Martin broke less than 24 hours before the company was due to open its St. Athan plant in Wales could be considered unfortunate timing. Yet its electrifying effect on the market also meant that Aston boss Andy Palmer got to go on stage at his spiffy new factory with the company's share price higher than it had been since the big slump in July. Swings and roundabouts.

Nobody at Aston was denying Autocar's story - that Stroll is hoping to head a consortium to take advantage of Aston's low share price and ultimately gain control of the company. The Canadian billionaire has already displayed both deep pockets and a love of fast cars with his takeover of what used to be the Force India F1 team, now Racing Point, which is son Lance drives for.

But nor was there any confirmation to be found at St Athan, just flat "no comments" from CEO Andy Palmer downwards. As a publicly quoted company Aston is seriously restricted in terms of saying things that could move the market. "It's a rumour," said Palmer, when PH grabbed ten minutes with him, "we're a public company, I can't speculate on rumours."


Yet if Stroll or another raider has serious ambitions on taking control of Aston Martin, there are some serious hurdles to overcome. The first being the fact that only around a quarter of the company's stock is in "free float" and available to buy, given the substantial stakes already held by Italian group Invest Industrial and the Kuwait based Adeep/ Primewagon group, which between them still control well over half of it. Daimler also has four percent.

Any attempt to combine Aston with Racing Point, or even to rebrand it as a full Aston works effort, could also get seriously complicated, Palmer emphasising that Aston's title sponsorship of Red Bull Racing is signed until at least the end of next season.

While he wouldn't talk about any takeover, Palmer was willing to discuss both his frustration with the falling share price and his plans for turning the company around. "I suppose it's fair to say there was a significant part of the investment community that didn't believe we could get here, and which doesn't believe we can get to the launch of the [DBX] and delivery of the plan," he said.


"In consequence we've got quite a high short - which is looking at the short term and betting against us. That is frustrating but the only way to deal with it is to deliver the car. Until I announce how many orders we've got and you see the factory spitting cars off the end of the line you're going to continue to have people bet against you."

It's really not hyperbole to say that the DBX is the most important vehicle that Aston has ever launched. Having already resorted to a bond issue (007 pun intended) to get its DBX finished, the company's future rests on its success. To his frustration, Palmer is prevented from sharing order numbers yet, but the signs look positive: "we've got all of our U.S. dealers here for the factory opening," he said, "they are usually the most hard-nosed people in the community, but I've never seen them as happy as they are now."

When asked if he stood behind his previous predictions that Aston will build up to 5,000 DBX a year, and average around 4,000 over the life of the car, Palmer said "I don't see any reason to change that prognosis."


But St. Athan also proves the depth of the company's commitment to both the DBX and the pure electric Lagonda models that will ultimately be built in Wales. The idea of using repurposed aircraft hangers to produce cars might create the mental image of something a bit lashed together, but the reality has to be one of the most modern car factories in Europe, as well as the newest. This isn't going to have cars pushed between stations on dollies or skids like most low-volume makers, rather an entirely proper automated production line that will carry the DBX around the vast site, including several transitions between different floors on smart lifts and a parts warehouse that looks like an Amazon Fulfillment Centre.

It's also genuinely humbling to talk to some of the workers who have been taken on in a part of the world that is getting short of skilled, highly-paid jobs and discover what working for Aston means for them. The "Made in Wales" plates that the DBX will wear represent every bit as much pride as the "Made in England" ones on the rest of the range do.

When running at full crank, St. Athan will be producing a DBX every thirty minutes, with each one representing a much-needed six-figure infusion into the company's coffers. Believe that will happen - and the world does seem keen on ultra-posh SUVs - and Palmer's confident assessment becomes easier to accept.


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Author
Discussion

Mr Tidy

Original Poster:

22,065 posts

126 months

Monday 9th December 2019
quotequote all
I can't help thinking Aston Martin seem to have over-reached themselves, especially when their V8 comes from Mercedes - I'd give them 2 years at best before they crash and burn yet again (but I'd love to be proved wrong)!

TyrannosauRoss Lex

34,944 posts

211 months

Monday 9th December 2019
quotequote all
Mr Tidy said:
I can't help thinking Aston Martin seem to have over-reached themselves, especially when their V8 comes from Mercedes - I'd give them 2 years at best before they crash and burn yet again (but I'd love to be proved wrong)!
2 years at best? I think you're wrong smile

Andrewph75

48 posts

150 months

Monday 9th December 2019
quotequote all
Firstly well done Aston for getting over the line, let's hope the DBX does for them what the Cayenne did for Porsche and brings the cash in so they can fund the pipeline of sports cars.

Sure they have some challenges but if comes off Andy Palmer will deserve a knighthood. - delivering a new car in a new factory is an achievement for any car company. And whether you like the look of the current range, they are surely the best engineered Aston range ever.

Finally can't wait to hear/see the Valkyrie at Le Mans 2021 - who thought we'd hear a V12 again after the diesels.

wab172uk

2,005 posts

226 months

Monday 9th December 2019
quotequote all
Mr Tidy said:
I can't help thinking Aston Martin seem to have over-reached themselves, especially when their V8 comes from Mercedes - I'd give them 2 years at best before they crash and burn yet again (but I'd love to be proved wrong)!
It's true Aston seam to bounce from one crisis to another. But I think the tie up with Mercedes for engines will only serve Aston well. The cost of developing new engines would have probably been unfeasible for Aston Martin. They need Hybrids and eventually EV cars. Buying them in makes more sense, even if it does P155off a small number of people who probably never buy Aston Martins anyway.

The DBX will no doubt be a sales success, as now I've seen a few reviews, it looks an awesome car for those with the ability to pay for one.

For me, they just need to make their cars lighter. Both Aston Martin and Jaguar seem to make their cars out of Granite, compared to their rivals.

TyrannosauRoss Lex

34,944 posts

211 months

Monday 9th December 2019
quotequote all
Andrewph75 said:
Firstly well done Aston for getting over the line, let's hope the DBX does for them what the Cayenne did for Porsche and brings the cash in so they can fund the pipeline of sports cars.

Sure they have some challenges but if comes off Andy Palmer will deserve a knighthood. - delivering a new car in a new factory is an achievement for any car company. And whether you like the look of the current range, they are surely the best engineered Aston range ever.

Finally can't wait to hear/see the Valkyrie at Le Mans 2021 - who thought we'd hear a V12 again after the diesels.
beer

Lt. Coulomb

202 posts

53 months

Monday 9th December 2019
quotequote all
This Gaydon guy now has a brother, St. Athan.

smilo996

2,754 posts

169 months

Monday 9th December 2019
quotequote all
Another victim of British disease. When the underdog does well, then in come the doomsayer comments. .

AmosMoses

4,039 posts

164 months

Monday 9th December 2019
quotequote all
Gaydon Count 0 - This is becoming unprecedented!

Lt. Coulomb

202 posts

53 months

Monday 9th December 2019
quotequote all
AmosMoses said:
Gaydon Count 0 - This is becoming unprecedented!
St. Athan spoilt the party!

Harry H

3,379 posts

155 months

Monday 9th December 2019
quotequote all
A quick glance at the lead photo on the home page and I assumed this was an article about a new Ford Fiesta.

Good god that DBX is bland.

GT119

6,348 posts

171 months

Monday 9th December 2019
quotequote all
Harry H said:
A quick glance at the lead photo on the home page and I assumed this was an article about a new Ford Fiesta.

Good god that DBX is bland.
In Bathstore white I would agree, needs a deep metallic.

Cold

15,207 posts

89 months

Monday 9th December 2019
quotequote all
GT119 said:
Harry H said:
A quick glance at the lead photo on the home page and I assumed this was an article about a new Ford Fiesta.

Good god that DBX is bland.
In Bathstore white I would agree, needs a deep metallic.

Cripes

32 posts

59 months

Monday 9th December 2019
quotequote all
[redacted]

poo at Paul's

14,116 posts

174 months

Monday 9th December 2019
quotequote all
TyrannosauRoss Lex said:
Mr Tidy said:
I can't help thinking Aston Martin seem to have over-reached themselves, especially when their V8 comes from Mercedes - I'd give them 2 years at best before they crash and burn yet again (but I'd love to be proved wrong)!
2 years at best? I think you're wrong smile
Will they make Q2 2020??

donteatpeople

831 posts

273 months

Tuesday 10th December 2019
quotequote all
anonymous said:
[redacted]
Tanking suggests a consistent, significant downward trend to me. Aston Martin is 12% higher than it was a month ago.

DaBing

4 posts

209 months

Tuesday 10th December 2019
quotequote all

Cripes

32 posts

59 months

Tuesday 10th December 2019
quotequote all
anonymous said:
[redacted]
Exactly, AM are underperforming the stock market with pretty low revenue growth for a non profitable business, but it's hardly a tanking stock.

It's easy to cherry pick figures to paint a picture of doom.

I hope AM do well with the DBX and prove all the naysayers wrong.

Cripes

32 posts

59 months

Tuesday 10th December 2019
quotequote all
Personally I don't think AM losing 65% of share value over 12 months mean they are a clear cut basket case destined to fail. The market, outlined by share price over the past five months, seems to agree with this.

Maybe we have a different view on what a tanking stock looks like. To me AM had a massively overvalued price at the IPO, has faced some pretty major challenges ( failure to sell the Vanquish tooling, needing to issue bonds to fund the DBX and over estimating sales forecasts). Sure there has been a massive correction and those that bought at the IPO must be pissed. Does this make AM junk? Not according to share price over the last five months.

bakerstreet

4,755 posts

164 months

Wednesday 11th December 2019
quotequote all
I think the DBX is a great looking car, but I don't believe that there is enough volume in something like the DBX to rescue Aston and I can see them being sold next year.

Also ultimately the DBX is 10 years behind the times. If they had arrived at the same time as the Range Rover Sport (05), then I think they could have done really well. I say really well, it would still be a struggle to sell against FFRRs, RRS and X5.

RoverP6B

4,338 posts

127 months

Wednesday 11th December 2019
quotequote all
The irony is that the DBX is the best-looking car AM currently makes. The rest of the range are such munters... a stark contrast with a decade ago where the entire range was beautiful.

What I find most scandalous is that Palmer encouraged so many of his employees to buy into the share issue and they are now out-of-pocket big time...