AA group raises £1.4 billion in London float but shares slump
Monday 23 June 2014
The AA became a public company for the first time in its 109-year history today after a decade under private-equity control.
The roadside assistance group was valued at £1.4bn as it joined the London Stock Exchange, completing one of the most anticipated flotations in recent years. However, despite the fanfare surrounding the float, shares slumped 7.2 per cent below the 250p offer price.
The move is a significant landmark for the AA, which was founded in London’s West End by a group of motoring enthusiasts, hoping to help drivers avoid police speed traps.
The company was owned by its members until 1999 when it was acquired by Centrica for £1.1 billion. The energy group eventually sold the AA to CVC and Permira five years later, who eventually combined it with over-fifties group Saga in a highly leveraged £6.2 billion merger.
The AA now has 13 million members, four million of whom are individuals and the rest business-to-business customers. Unlike its former sister company, which flopped when it floated last month, the AA was sold by its private-equity owners before it went public.
In an unusual buy-in deal, the group was acquired by a management team led by former Green Flag boss Bob Mackenzie, backed by City investors like Aviva and BlackRock.
Mackenzie, who will be the AA’s executive chairman, said part of the £185 million raised would be used to pay down the £3 billion of debt the management team inherited from the AA’s former owners.
The group’s management team — which also includes chief executive Chris Jansen — stands to make as much as £60 million over the next five years if the AA’s total shareholder return increases by an average of 12 per cent a year.
“We have spent a couple of years looking at this business and are delighted to have received the backing of leading UK institutions,” Mackenzie said.
- 1 Isis 'jihadi bride' claims forced sex with Yazidi girls is never rape because Koran condones it
- 2 Woman accidentally shoots herself in the head while posing for a selfie
- 3 Art Garfunkel: Paul Simon is a 'monster' with a Napoleon complex
- 4 Isis burns woman alive for refusing to engage in 'extreme' sex act, UN says
Isis 'jihadi bride' claims forced sex with Yazidi girls is never rape because Koran condones it
Woman accidentally shoots herself in the head while posing for a selfie
Isis burns woman alive for refusing to engage in 'extreme' sex act, UN says
Puerto Rico, island of lost dreams: People are leaving the debt-hit territory in droves as near neighbour Cuba's star rises
16-year-old girl beaten and burned alive by lynch mob in Rio Bravo, Guatemala
As a white man, I'm surprised more women aren't tweeting the hashtag #KillAllWhiteMen
Scotland may have to leave the EU even if it votes to stay in, David Cameron confirms
The day that Britain resigned as a global power
Almost a third of school pupils believe 'Muslims are taking over our country', study claims
SNP fury as HS2 finds 'no business case' for taking fast train service to Scotland
Gay marriage 'Bert and Ernie' cake bakery found guilty of discrimination in Northern Ireland
iJobs Money & Business
£40-50K: Guru Careers: We are seeking an experienced Software / C# Developer w...
£45,000 - £55,000: Neil Pavier: Are you looking for your next opportunity for ...
£45,000 - £55,000: Sheridan Maine: Are you a newly qualified ACA/ACCA/ACMA qua...
£50,000 - £60,000: Laura Norton: Are you looking for an opportunity within a w...