(Sharecast News) - Chinese auto group Geely has committed to invest £234m Aston Martin Lagonda to become its third-largest shareholder, sending shares in the UK in luxury car maker racing ahead on Thursday.
Geely will buy 42 million ordinary shares from largest shareholder Yew Tree, owned by Aston Martin chairman Lawrence Stroll, at 335p each and subscribe for another 28 million shares at the same price.
Aston Martin's stock closed at 231.2p on Wednesday and surged to 262p on the news. Geely will end up with a 17% stake in the company and one board seat. Yew Tree remains the largest shareholder at 21%.
Aston Martin added that it would receive around £95m in cash from the subscription of the new shares.
"Geely Holding, who initially became a shareholder last year, sees tremendous potential for Aston Martin's long-term growth and success," Stroll said in a statement.
"They offer us a deep understanding of the key strategic growth market that China represents, as well as the opportunity to access their range of technologies and components."
Reporting by Frank Prenesti for Sharecast.com
Aston Martin Lagonda (AML)
