AA’s biggest investors in conflict over £218m bid

A BATTLE over the AA’s future has broken out after its two top shareholders took opposite sides on a £218m bid for the breakdown firm.

In what has been billed as a rescue deal, private equity businesses Warburg Pincus and Towerbrook Capital have offered 35p per share for the troubled business and help with tackling its £3bn debt mountain.

But hedge fund Albert Bridge, the AA’s top investor, has come out against the ‘derisory’ bid and is urging others to do the same.

It has put it on a collision course with the AA’s board and Davidson Kempner, another hedge fund, the second-biggest shareholder, which support the takeover.

The two investors appear to be spoiling for a fight, having ramped up their stakes in the AA over recent days, in what will be seen as manoeuvring to gain more leverage.

Davidson Kempner increased its holding from 3.2pc to 16.1pc, while Albert Bridge’s holding has risen from 18pc to 20pc since August.

The showdown has left the deal – which needs 75pc shareholder approval – hanging in the balance as both sides seek to rally others behind them. Albert Bridge claims the bid by Warburg and Towerbrook undervalues the AA, which was valued at 250p per share or £1.4bn when it floated in 2014.

As part of their proposal, Warburg and Towerbrook are offering a further £380m to help tackle the AA’s £2.7bn debts. Otherwise the company faces punishing repayments on bonds due in 2022.

AA chairman John Leach claimed the takeover is ‘in the best interests of the AA, its shareholders and wider stakeholders’.