AA Sale or Floatation Could Raise £3 billion

The AA, Britain’s largest motoring organisation, could soon be sold or floated on the stock market. According to one Mail on Sunday report, accountants PriceWaterhouseCoopers have been compiling a financial report that could help sell the AA to investors or buyers. The report says private equity owners CVC and Permira wanted to raise £3 billion for the 15 million-member business. They bought the AA from British Gas owner Centrica in July 2004 for £1.7 billion.

Shortly after CVC/Permira’s acquisition of the AA a restructuring programme was initiated which included the closure of the company’s loss-making tyre-fitting unit and most of its vehicle-servicing centres. Since then the workforce has been trimmed from 10,000 to 7000.

After news of the potential sale broke, the Independent reported that AA chief executive Tim Parker (also a former Kwik-Fit CEO) admitted he has cut too many jobs from the motoring organisation. According to the newspaper, the news could dent prospects for the sale of the AA. The GMB general union said patrolmen currently applying to take leave were being told the “holiday book” was closed until March because of insufficient staff. “We probably reduced our patrol force more than we should have done,” Parker said in the AA’s latest monthly “On Patrol” audiotape.

According to The Independent, Tim Parker, who previously ran Kwik-Fit for CVC, is estimated to have gained £20 million after he oversaw changes there and sold the business to PAI. The reports state the sale of the AA would lead to another multi-million pound windfall for Mr Parker.