Roadside recovery and insurance group AA (AA.) announced at the beginning of August that it was being circled by private equity for an all-cash takeover. There were three rival bidders involved at the time – Platinum Equity Advisors, Warburg Pincus International, and a potential joint bid from Centerbridge Partners Europe and TowerBrook Capital Partners. All parties indicated that they would inject substantial amounts of new equity capital following completion to help AA reduce its net debt pile, which stood at £2.65bn at the end of January.
Now, Sky News has reported that US investment firm Apollo Global Management is considering throwing its hat into the ring with a £3bn bid. Apollo has informed AA’s board that it is interested in making an offer, but talks are at a less advanced stage than its competition. It has a history of acquiring debt-laden companies in both the US and UK.
Of the AA’s £2.7bn in loan notes, more than 50 per cent must be repaid within the next two years. As well as a takeover offer, the group is also exploring refinancing options, including raising new equity.
