AA - Centrebridge pulls out of race

All,

Announced this morning that Centrebridge, who was working in consortium with Towerbrook have confirmed to the Board of the AA that it does not intend to make an offer for the Company.  Separately, Platinum also confirmed they do not intend to make an offer. 

Therefore there are two distinct bidders left in the process. Towerbrook, on their own, remain in discussions with the Company.  The other bidding party,  Warburg Pincus have not made any statement, and would assume are still in discussions with the Company.  

Shares are below 30p currently, down c.20%.  Clients have remarked how volatile the equity share price has been, but it should be noted that a) the market cap is c. £200m and b) nearly 70% of the shareholding is declared and ‘Locked-up”.  The free float is maximum 30%, or £60m so small moves in volume has the ability to move the share price around.  

We continue to stay long at current levels, believing a bid is likely to emerge.  In the absence of a bid, the level of interest shown from three distinct groups, plus the underlying positive performance, there is limited downside to current levels.

Happy to discuss.

Tomás