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Investindustrial bidding for 50% of Aston Martin

DDAIF, F, VLKAY, MAHMF

Italian buyout firm Investindustrial is bidding to take a 50% stake in UK carmaker Aston Martin.

Investindustrial had reached an accord with Aston Martin’s current owner, Kuwaiti finance house Investment Dar, Thursday night only for Indian carmaker Mahindra & Mahindra Ltd. BY:500520, PINK:MAHMF to respond with a higher offer.

Both offers now give Aston Martin an enterprise value of GBP 750-M with an equity investment of about GBP 250-M.

Investindustrial believes that its plan to invest heavily in the technological side of the business should see it win out despite the late counter offer with the deal “almost tied up”, a source said.

Investindustrial has an agreement with Damiler AG XE:DAI, PINK:DDAIF Mercedes to act as a technical partner on the deal, with the German carmaker providing engines, gearboxes and other technical expertise. It is expected that Mercedes will also take a small equity stake in the business at a future date, the person added. US carmaker Ford Motor Co. NYSE:F is currently the firm’s technical partner.

Both bids are understood to want to retain production at Aston Martin’s main production plant in Gaydon, Warwickshire.

Investment Dar bought Aston Martin famed for its links to fictional British spy James Bond for GBP 479-M in Y 2007 but the finance house struggled under the debt load used to fund its acquisitions. In February Y 2011 lenders reportedly agreed to take a 10% stake in Investment Dar in exchange for an initial $70-M equity injection and full repayment of its $3.7-B debt pile in under a decade.

Investindustrial has experience in the luxury motor space after buying a stake in Italian motorbike maker Ducati in Y 2006 and netting a 3-times return on its investment when it sold the business to car maker Audi, part of Volkswagen AG XE:VOW, PINK:VLKAY for $1.1-B in July.

The firm, led by Andrea Bonomi is also in exclusive talks to buy tire maker Pirelli, according to people familiar with the matter.

Investindustrial and Mahrindra declined to comment.