By raising its stake in Aston Martin to 26.2%, the Yew Tree consortium underlined its confidence in the luxury car group's turnaround but breached a standstill agreement with Geely, another major shareholder, says broker Jefferies.
Yew Tree had agreed with the Chinese car group not to exceed 25% until at least August 2024.
Jefferies adds it is not clear what this might mean, but M&A interest around Aston Martin is growing as its fortunes should improve rapidly in 2024.
“One can assume that taking Yew's stake above 25% was not a surprise to Geely
“Depending on the source of the purchase (market or block), the free float may drop further below 30%.
“In addition to Yew Tree, stakes held by Geely (17%), PIF (19%), Mercedes (9%) and Lucid (3.7%) continue to provide M&A support to shares.”
Jefferies also previews the results expected on 2 November, saying it expects only modest improvements over the first half with units up by 17% and revenue up 17% to £591 million.
Underlying profit (EBITDA) is predicted at £53 million on a 14% margin, with a cash outflow of £88 million leading to net debt of £680 million.
'Buy' with a price target of 420p is Jefferies’ view.