Precise Investors

Saturday, December 10, 2022
Stocks & Shares

AA shares slump

shares slump

The company received a 35p per share offer for the whole company from TowerBrook Capital Partners (UK) and Warburg Pincus International

In the latest stock market news, shares in the AA slumped on Monday after the breakdown group confirmed it was close to accepting a takeover offer.

The company confirmed in a statement to investors that it had received a 35p per share offer for the whole company from TowerBrook Capital Partners (UK) and Warburg Pincus International.

It said its board “would be willing to recommend a cash offer” on the terms proposed, and that the company was in “advanced discussions” with the consortium.

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.

The board has for some time been reviewing a range of potential refinancing options, including the possibility of raising new equity, it added.

The proposal would see the consortium invest around £380m in the company to help it reduce its debt and refinance £913m of notes.

The AA said the bidders had to confirm their firm intention either way by 5pm on Tuesday in line with takeover rules.

Shares in the AA dropped more than 8% as markets opened on the London Stock Exchange, but regained some initial losses and were around 3.6% lower in early trading.

The company had posted a 2.6% slide in revenue to £478m in its interim first-half results in September, and saw its pretax profits slide 38.1% to £26m.

Reduced workloads as the pandemic hit road travel saw the group cut costs, including scrapping pay rises, freezing hiring, use of the government furlough scheme and a 15% pay cut for its board.

The document also described debt reduction as the group’s “key priority.”

The group, founded as the Automobile Association in 1905, had 966,000 policies at the end of July.


The articles are for information purposes only and Precise Investors shall not be held responsible for any errors, omissions or inaccuracies within it. Any rules or regulations mentioned within the website are those relevant at the time of publication and may not be the most up-to-date.

Precise Investors does not endorse any of the products or services that appear on it or are linked to it and are not liable for any action that you may take as a result of the content of this website, or losses or damage you may incur doing so.

There is no obligation to purchase anything but, if you decide to do so, you are strongly advised to consult a professional adviser before making any investment decisions.

Please remember that investments of any type may rise or fall and past performance does not guarantee future performance in respect of income or capital growth; you may not get back the amount you invested.

Leave a Reply