Back to press
Prevous
Next
This is some text inside of a div block.

AA’s BIGGEST SHAREHOLDER SETS UP ROADBLOCK TO BUY-OUT WITH OBJECTION TO "DERISORY' OFFER

The private equity takeover of the AA is approaching a roadblock, after its biggest shareholder said it will oppose the £219m deal.

Albert Bridge Capital criticised a 35p-a-share buy-out from Warburg Pincus and TowerBrook Capital Partners as “inadequate” and “derisory”.

Under the takeover mechanism used, the AA’s board needs 75pc shareholder approval, so the Chelsea-based fund’s 20pc stake is almost enough to block it.

The AA could be forced to reduce the threshold to a simple majority, risking a protracted battle. Albert Bridge’s opposition pits it against US hedge fund Davidson Kempner, a 16pc shareholder that has backed the deal.

The AA, chaired by City veteran John Leach, agreed terms with the private equity duo on Wednesday. But Drew Dickson, Albert Bridge’s chief investment officer, said the deal “fundamentally undervalues the equity”.

The share price had been “artificially and exaggeratedly depressed” by the pandemic, he said in a letter to shareholders.

“It is the private equity business model to try to pay as little as possible to secure control of these economics, and to use negotiating leverage to do so,” he said.

“Shareholders should be wary of any acquirer looking to buy at the bottom and keep all future upside to itself.” The board and other investors must “demand that the consortium make an offer that is more palatable”, he added.

The AA has struggled since floating in 2014. Investors, including former star stockpicker Neil Woodford, backed the stock market debut led by former car park executive Bob Mackenzie who was fired after a “sustained attack” on a colleague in 2017.

The AA’s shares have fallen as it struggled to repay debts. It owes more than £2.5bn to banks and bondholders. The prospective owners have pledged to inject £378m of equity to reduce the debt burden.

Mr Leach said last week that the deal was in the best interest of “shareholders and wider stakeholders”.


‍

You might Also Like

OK, 2022 WAS A DISASTER FOR TESLA. WHAT NEXT?

Read more

FAULT LINES IN US AND EUROPEAN EQUITIES AND BEHAVIORAL FINANCE

A discussion between Drew Dickson of Albert Bridge Capital and Morgan Housel of The Collaborative Fund; moderated by Jamie Catherwood of O'Shaughnessy Asset Management.
Read more

ON BEHAVIORAL FINANCE AND STOCK PICKING

Drew chats with Dr. Daniel Crosby about behavioral economics and stock-picking.
Read more

WHY EUROPEAN VALUE STOCKS MIGHT WIN

In a return to normalcy, Europe might have a lot of catching up to do – particularly some of the value stocks across the continent. For American investors that have previously been shunning European opportunities, this is something worth considering.
Read more
Navigations
HomeTeamDrew's viewsPressContact
Disclaimers
Legal & regulatoryPrivacy policyCookies policy
How to get in Touch
info@albertbridgecapital.com

Subscribe to Drew's Views

No spam. Unsubscribe anytime.
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
© Albert Bridge Capital 2022
Website by SW10media.com
homeTeamdrew's viewspressCOntactDisclaimers
OK, 2022 WAS A DISASTER FOR TESLA. WHAT NEXT?
FAULT LINES IN US AND EUROPEAN EQUITIES AND BEHAVIORAL FINANCE
ON BEHAVIORAL FINANCE AND STOCK PICKING
WHY EUROPEAN VALUE STOCKS MIGHT WIN
EUROPE'S COMPANIES LANGUISH IN THE SLOW LANE
BEHAVIORAL FINANCE AND VALUE INVESTING IN EUROPE
BEHAVIORAL INVESTING AND THE INTERSECTION WITH SPORTS
THE ‘TESLA-FINANCIAL COMPLEX’
HERE'S THE MATH FOR TESLA'S STOCK PRICE IF IT BECOMES THE APPLE OF CAR MAKERS
YOU NEEDN'T HOLD YOUR STOCK WINNERS
BEHAVIORAL ECONOMICS' LATEST BIAS
AA’s BIGGEST SHAREHOLDER REJECTS 'DERISORY' OFFER
AA’s BIGGEST SHAREHOLDER SETS UP ROADBLOCK TO BUY-OUT WITH OBJECTION TO "DERISORY' OFFER
AA TAKEOVER TALKS TRIGGER SHAREHOLDER BREAKDOWN
STALLING AA CALLS FOR RESCUE OF ITS OWN
THERE'S SUCH A THING AS TOO MANY MEETINGS WITH THE CEO
VALUE STOCK INVESTORS HOPE VACCINE BOOST CAN LAST
BAILLIE GIFFORD'S NEVER-SELL MANTRA IS A SONG FOR FOOLS
FINDING ALPHA THROUGH BEHAVIOURAL INVESTING IN EUROPE
I'VE PULLED OUT ALL THE STOPS FOR TESLA, BUT CAN'T FIND UPSIDE.
THIS BULL MARKET ISN'T AS BIG AS YOU THINK
BLENDING BEHAVIOUR & FUNDAMENTALS AT ALBERT BRIDGE CAPITAL
INMARSAT BUYOUT FACES FRESH OPPOSITION AS COURT RULING LOOMS
BUBBLE ECONOMICS: THE ACTIVE VS. PASSIVE DEBATE
SHORT SELLERS "SHOULD BE KNIGHTED, NOT SPITED"
FINANCIAL TWITTER LOSES A SOURCE OF HUMILITY AND WISDOM, BUT GOOD VOICES REMAIN
THE FUTILITY OF MARKET TIMING
ALBERT BRIDGE BORDERS ON ‘SUGGESTIVISM’ IN BACKING MICRO FOCUS RECOVERY - PROFILER
ALBERT BRIDGE’S DREW DICKSON AT IRA SOHN
VOLKSWAGEN STOCK IS CHEAP AND HAS LOTS OF HORSEPOWER
THE DAY VOLKSWAGEN BRIEFLY CONQUERED THE WORLD
A CHALLENGE TO THE BIGGEST IDEA IN BEHAVIOURAL FINANCE
ALBERT BRIDGE CAPITAL’S DICKSON DISCUSSES NOBEL PRIZE WINNER RICHARD THALER
ALBERT BRIDGE CAPITAL'S DICKSON INCLUDED IN THE HEDGE FUND JOURNAL TOMORROW'S TITANS 2016
ALBERT BRIDGE HIRES FORMER BAML’S KENNY FOR MARKETING
ALBERT BRIDGE HIRES BAML CAP INTRO HEAD
EX-FORTRESS AND MORGAN STANLEY HEAVYWEIGHT JOINS HEDGE FUND STARTUP
EX-PERELLA WEINBERG MANAGER RAISES $150M FOR STARTUP
FORMER PERELLA WEINBERG PARTNERS EXEC DICKSON LAUNCHING NEW HEDGE FUND
EX-PERELLA WEINBERG PARTNER LAUNCHES ALBERT BRIDGE CAPITAL
EX-PERELLA WEINBERG PARTNER TO LAUNCH EQUITY HEDGE FUND