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.
New essay by JK Rowling went live on Pottermore site on Friday
New UK station Russia Today gives a very bizarre view of Britain
- 1 Chinese authorities arrest 11 people over exhuming woman’s body to sell as corpse bride
- 2 Canadian actor punched in face after 'Islamophobia' experiment goes wrong in wake of Ottawa shooting
- 3 Woman blinded as a child can see again after hitting her head on a coffee table
- 4 Paul Hollywood: Police asked if I wanted them to arrest Mary Berry for vandalism after she 'defaced' my car
- 5 If you think Russell Brand’s new book is confused, you should read what his critics have to say about it
'Nasa Confirms Six Days of Darkness in December': No, they don't - it's a hoax
Tower of London poppies: Tens of thousands of people flock to see installation in its final days
Top Gear presenter Jeremy Clarkson criticised for beer tweet
Woman blinded as a child can see again after hitting her head on a coffee table
Bryan Adams' heartstopping images of wounded British soldiers to go on show at Somerset House
Pope Francis declares evolution and Big Bang theory are real and God is not 'a magician with a magic wand'
Huge surge in Ukip support after EU funding row, according to new poll
Ukip ‘exploiting grooming scandal’ to secure party’s first police chief
Nigel Farage: 'There’s nothing wrong with white people blacking up'
Maureen Lipman says 'she can't vote Labour while Ed Miliband is leader'
Muslims, immigration and teenage pregnancy: British people are ignorant about almost everything
iJobs Money & Business
£18000 - £23000 per annum + Comission: SThree: SThree, International Recruitme...
£20000 - £25000 per annum + OTE £35K: SThree: We consistently strive to be the...
£20000 - £23250 Per Annum pro rata: Clearwater People Solutions Ltd: Pro rata ...
£40 - 48k + Benefits: Guru Careers: We are seeking a Marketing Manager to join...