Aston Martin rejects ‘disguised’ Chinese takeover in favour of Saudi money

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Aston Martin chairman Lawrence Stroll has rejected a “disguised” Chinese offer to take over the company “on the cheap”.

Mr Stroll on Friday said the company had turned down the offer of £1.3bn of fresh capital from Chinese car maker Geely and private equity house InvestIndustrial, which would have handed the two firms control of the troubled luxury car maker.

“They were really just trying to make an offer, in the banks’ and our opinion, to buy the company on the cheap, coming through the back door rather than going through the front door and paying a premium,” Mr Stroll said. “We believe it was a disguised approach.”

News of the spurned approach came as Aston Martin unveiled a plan to raise £653m from investors, led by Mr Stroll and Saudi Arabia.

Saudi Arabia’s sovereign wealth fund, together with existing shareholders Mercedes-Benz and investors led by Mr Stroll, will inject new funds to pay off debt and fund the company’s plan to roll out battery-powered versions of its cars.

The Saudi Public Investment Fund will invest £78m, with the remaining £575m raised through a rights issue. Mercedes will invest £56m and Mr Stroll’s investment company will pay £105m, maintaining his position as the largest shareholder.

He defended the company’s new Saudi shareholders, who will also receive at least one board seat at Aston Martin and own 17pc of the firm.

Mr Stroll said PIF was “a great investor, very professional, as they've invested in many other blue chip companies, not only Aston Martin”.

Aston Martin’s share price had fallen in recent months in anticipation of the need for more funding as it struggled under the burden of its debt. Two months ago it warned investors to expect an interest bill of £130m this year.

Shares bounced 20pc following todays’ news.

Aston Martin said it expected to hit its financial targets for the year, with sales of its new DBX sports utility vehicle up 40pc.

The company was last rescued by investors in 2020, led by billionaire Canadian investor Mr Stroll. He took over as executive chairman and sacked chief executive Andy Palmer, replacing him with Tobias Moers, who himself quit after the company lost a number of staff.

Mr Moers was replaced in May by Amedeo Felisa, who was chief executive of Ferrari from 2008 to 2016.