AA shares skid off track as US private equity suitor walks away from the race to buy the breakdown service
- Private equity firm Platinum Equity has withdrawn from the race
- Discussions with the board of AA have been terminated by mutual agreement
- The news sent the stock down 17 per cent to around 28p on Wednesday
Platinum Equity, one of the potential buyers for breakdown business AA, has withdrawn from the race three weeks after a deadline for bids was extended.
The private equity firm said that it had walked away from discussions with AA’s board ‘by mutual agreement.’
The news was unwelcome among AA shareholders with many hitting the sell button, sending the stock down 17 per cent to 28p.
Platinum Equity has withdrawn from the race to buy the AA by mutual agreement
It follows weeks of speculation over the future of the business after it announced talks with three potential bidders in early August.
However, finding a buyer from the trio has so far proved elusive, and earlier this month a deadline set by the Takeover Panel passed without any firm bids arriving.
This forced AA to ask for an extension, with the new deadline of 29 September.
In a statement on Tuesday, Platinum said: ‘Platinum Equity announces today that discussions with the board of AA have been terminated by mutual agreement and it does not intend to make an offer for AA.’
But the US investor reserved its right to return to the negotiating table at a later point. However, this will be only with the agreement of the AA’s board and if a rival bid is made.
Platinum’s withdrawal potentially leaves only one consortium left in the race to buy the company.
Late last month reports emerged that rival bidder Warburg Pincus was talking to Centerbridge Partners and Towerbrook Capital Partners about combining forces rather than making competing bids for AA.
Last month AA said that its trading has been resilient during the pandemic and it expects only a small hit when it presents its results on 29 September.
Chairman John Leach said the businesses needed to pay down debts in order reach its ‘full potential’.