New bid to end AA breakdown
HOPE OF RESCUE FROM STOCKS SKID
ROADSIDE rescue firm the AA could end up back in private equity hands under a possible £218million deal.
Bosses at the publicly listed company yesterday confirmed they had received a proposed offer from Londonbased TowerBrook Capital Partners and New York heavyweight Warburg Pincus.
The AA board said it was “willing to recommend” it to shareholders, who have seen their stakes’ value plunge 45% this year – and 90% since 2015.
TowerBrook and Warburg Pincus have until 5pm today to make a firm offer.
If the deal goes ahead it would mark the end of the breakdown firm’s disastrous six years on the stock market.
The Automobile Association dates back to 1905 when a group of motoring enthusiasts got together to warn fellow drivers about police speed traps.
It was owned by its members until 1999 when it was bought by British Gas owner Centrica which sold it on to private equity firms CVC and Permira in 2004. That led to the AA being listed on the stock market in 2014 at 250p a share. But the move lumbered it with massive debts that still stand at £2.6billion for a company with a stock market value of just £200m and a share price of 32p.
The proposals from TowerBrook and Warburg Pincus include cuttings its debts by £ 380m and refinancing another £900m.
The AA has around 2,700 roadside patrols attending an average of 9,400 breakdowns daily. It also has an insurance arm.
The AA said: “The board believes the company needs a more sustainable capital structure and requires a significant amount of additional new equity in order to reduce the group’s indebtedness and to fund future growth.”
A boardroom brawl in 2017 saw executive chairman Bob Mackenzie, 67, sacked following a fight ight in a hotel bar where a meeting eting had been taking place.