4th Aug 2020 11:33
(Alliance News) - AA PLC on Tuesday confirmed that several parties have made takeover offers, while the roadside assistance provider also is evaluating a range of refinancing options, including a share sale.
AA, which also provides motor insurance and driving lessons, said it currently in talks with several parties in relation to a wide range of potential refinancing options and, as part of discussions, three parties have made separate cash bids for the company.
The three parties are Centerbridge Partners Europe LLP and TowerBrook Capital Partners UK LLP, acting jointly, plus Platinum Equity Advisors LLC and Warburg Pincus International LLC individually.
The Times newspaper on Tuesday reported that one of the bidders had potentially made an offer of 40 pence a share, equating to a market value of about GBP250 million, or about GBP2.9 billion including GBP2.65 billion of debt.
Shares in AA were trading 14% higher at 28.40p each in London on Tuesday morning, valuing the company at GBP176.5 million.
"The potential offerors have each indicated that any possible offer would involve a significant amount of new equity capital being injected into the group, in order to reduce indebtedness following completion. There can be no certainty that any offer will be made for the company, nor as to the terms on which any offer might be made," AA said, without giving further details.
The company has a net debt of GBP2.65 billion, of which GBP913 million is scheduled to fall due for repayment within the next two years.
Debt reduction is a key priority, AA said, and the company continues to focus on its capital structure and on reducing indebtedness.
Chair John Leach said: "The AA is a high-quality and robust business, with an iconic brand, a resilient business model and a highly committed and loyal workforce. However, in order for us to be able to achieve our full potential, the board believes that it must now prioritise reducing the group's indebtedness to provide the business with the right long-term capital structure - which we hope the current refinancing process will achieve."
By Tapan Panchal; [email protected]
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