8:26 am, November 24, 2020
The AA has received an offer of £218m for the business from private equity firms TowerBrook Capital and Warburg Pincus.
Suitors have been circling the breakdown group since August – as reported by Car Dealer – with TowerBrook Capital and Warburg Pincus among them.
Now shareholders are being offered 35p a share by the firms. If accepted, it will see the AA leave the stock market after a disastrous six years as a listed business.
It initially listed on the London Stock Exchange in 2014 at 250p a share with armchair investors keen to buy into a household name, but after jumping to 450p the price soon plummeted.
The previous owners landed the firm with too much debt and the price never recovered – it started today (Nov 24) at 31.85p.
The new owners say they will invest £380m into it to pay off high debts and loan repayments racked up during over-expansion that are due next year.
Bosses at the AA are recommending the offer, which has to be formalised by the end of today (Nov 24). They revealed in May that they’d been reviewing ways to deal with its high debts.
‘The board believes that 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,’ it said in a statement.
In 2017, a boardroom brawl saw executive chairman Bob Mackenzie sacked after a fight in a hotel bar where a meeting had been taking place.
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