The AA’s £3bn takeover in doubt as bidders look to join forces

Latest News | Mergers & Acquisitions

British breakdown cover and roadside assistance firm The AA, which was recently subject to a £3bn takeover bid, has received news that two of its bidders could join forces to launch a collective bid. This would raise competition concerns with the Competition and Markets Authority (CMA).

Two of the original bidders for The AA are in talks about joining forces in a move that could also scupper shareholders’ aims of creating bidding war for the company.

Warburg Pincus has reportedly held discussions about partnering with the consortium of two M&A firms, Centerbridge Partners and Towerbrook Capital Partners.

Platinum Equity is the third firm who were orientally planning on placing an offer – and are not a part of today’s proposed plans.

Whichever firm does complete the takeover, would also be taking on The AA’s debt of £2.65bn – £1bn of which needs to be repaid by the end of 2021.

A statement from the AA read: “The board of AA believes that in order for the business to achieve its full potential it needs to have greater financial flexibility to make longer-term investment decisions that are in the best interests of the group’s shareholders and its wider stakeholders. To achieve this, the group needs a more stable and sustainable capital structure and this requires a significant amount of additional new capital in order to reduce the group’s indebtedness and to fund future growth.”

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