Momentum for the IPO slowed this week as investors balked at the highest valuations sought.
Aston Martin said investors in its initial public offering should be prepared to pay GBP 19 ($24.64) per share or risk losing out when the company lists on the London Stock Exchange this week, according to terms obtained by Bloomberg.
The figure is toward the lower end of an updated range of GBP 18.50 to 20 given out on Monday, but well below the top end of GBP 22.50 that the company had been targeting in the run-up to the deal.
Momentum for the IPO slowed this week as investors balked at the highest valuations sought. The company has said it has no fears about Brexit, but it may be no coincidence the price has fallen as negotiations between the UK and the European Union take an uncertain turn.
With a valuation of about GBP 4.31 billion based on GBP 19 a share, Aston Martin’s market-cap-to-Ebitda ratio will still be about even with supercar rival Ferrari NV (based on Aston’s half-year results). While the total stock-market value is lower than the GBP 5.07 billion Aston sought, it’s still pretty good for a company that’s less profitable and has a weaker balance sheet. Analysts had shown concern the valuation being sought was too ambitious. Still, Aston Martin’s owners will reap a 10-fold gain on their investment in about six years.