AA extends takeover offer deadline as interim profits slip
AA has extended the deadline for private equity suitors to make a takeover offer for the company, as the roadside assistance group reported a drop in profit as the pandemic hit its operations.
The company confirmed last week that it was in talks about a possible all-cash offer from a consortium made up of private equity firms Towerbrook Capital Partners and Warburg Pincus.
The consortium had had until this evening to announce whether or not it intended to make an offer for the company, but in a stock exchange filing this morning AA announced that it had extended the deadline to 27 October.
The extension comes as AA reported a 38 per cent slump in pre-tax profit for the first half of the year. Profit before tax fell from £42m to £26m as the coronavirus pandemic dented the roadside recovery group’s business.
Revenue slipped 2.6 per cent in the six months to 31 July, falling to £478m.
AA shares slipped 0.68 per cent following the news.
The company said it “remains cautious” about the second half of the year given the uncertainty posed by the Covid-19 crisis, but reiterated its expectation that it would deliver a “robust performance” next year.
Chief executive Simon Breakwell hailed AA’s “remarkably strong performance” in the first half, which he said reflected “the resilience of our operations and the swift actions we took to mitigate the challenges presented by Covid-19”.
AA was floated in London in 2014, but the company’s share price has slumped in recent years amid concerns over the size of its debt pile.
The group had also been in takeover talks with Centerbridge Partners Europe and Platinum Equity Advisors about a possible buyout, but confirmed last week that talks had broken down.