Kuwait's Investment Dar is in talks with two potential bidders for a 50 per cent stake in Aston Martin, the famous sports carmaker known for its vehicles' starring role in Skyfall and other James Bond films, according to four people familiar with the matter.
India's Mahindra & Mahindra and European buyout group InvestIndustrial are final bidders for the stake, which would see Aston Martin increase its capital in order to bring in new investors alongside a consortium led by the Kuwaiti group.
Industrial have valued Aston Martin's current equity at around £250m, according to two people familiar with the matter. Mahindra & Mahindra made a higher bid, those people said.
Industrial's offer also includes a technological partnership with Daimler's Mercedes-Benz that could be considered a "trump card", one person close to the deal said.
According to a second person, one structure for the deal being discussed would see the new investors and Investment Dar keep 50:50 voting rights, but the Kuwaitis hold onto 60 per cent of the business.
However, on Sunday Adnan al-Musallam, Investment Dar's chairman and managing director, in an interview with Kuwait's Al-Watan newspaper, denied an earlier Financial Times report on the offers for Aston Martin and said that the company was not negotiating a stake sale.
InvestIndustrial, which is being advised on its bid by JPMorgan, declined to comment, as did Mahindra & Mahindra and Daimler. Aston Martin did not return calls seeking comment.
Talks on the stake sale continued into the weekend, but had not resulted in a deal as of Sunday afternoon. One person briefed on the negotiations said the parties were "pretty close on the economics and voting rights" of a possible deal.
Investment Dar led a consortium that bought Aston Martin from Ford Motor in a deal valued at £479m in 2007, before the financial crisis stretched the Kuwaiti group's finances and dented demand for the UK company's luxury sports cars such as the Vantage and DBS.
Ulrich Bez, Aston Martin's CEO, has been searching for industrial partners or financial investors to bolster the business at a time when it and other carmakers need to make big investments in new vehicles, engines, and emissions-cutting technology. The UK carmaker builds cars on a platform originally developed by Ford, and buys engines made by the US carmaker at its plant in Cologne, Germany.
Aston Martin last year sold £300m of high-yield bonds to refinance its bank loans.
Mahindra & Mahindra is the world's largest maker of tractors and India's leading producer of sport utility vehicles. In 2008 it was outbid by rival Indian group Tata Motors for control of bigger UK carmaker Jaguar Land Rover, which Tata bought for $2.3bn.
Mahindra's interest in Aston Martin would mark the latest step in a plan by the Mumbai-base group to develop a diversified international automotive business. Last year it bought struggling South Korean SUV manufacturer Ssangyong Motor for $466m.
Were its offer to succeed, it would mark the first international foray by the group since Harvard-educated Anand Mahindra formally replaced his uncle in August as the head of the family-controlled group.
Analysts said a deal to buy a stake in Aston Martin would raise the company's visibility with global investors and give the Indian group access to new technology. "Mahindra do want to move into new markets, especially in America, and while there isn't any obvious fit between the two businesses, a brand like Aston Martin would raise their profile and they would be taken more seriously," said Deepesh Rathore, managing doector for IHS Automotive in India.
Mahindra earlier this year studied the possibility of acquiring the assets of banrkupt Swedish automaker Saab, but no deal materialised.
Source Financial Times By Rachel Sanderson, John Reed and James Crabtree