AA Group raises £1.4bn from IPO

UK motoring firm AA has completed an initial public offering to raise gross proceeds of £1.4 billion.

The offer price had been set at 250 pence per share and comprised of approximately 554 million new and existing shares.

Previously AA had said that the company will offer approximately 85 million new shares, and will use approximately £185 million of expected net proceeds after fees to reduce the overall net leverage of the Group.

AA said that the selling shareholder has agreed to sell their entire 100 percent stake in the company.

Bob Mackenzie, executive chairman, said:"We are delighted to have secured £1.4 billion to acquire the AA, with our financial backing coming from many leading UK institutions. I would like to thank my colleagues on the MBI team, together with the AA's existing management, the vendors and all the advisors involved for their efforts in bringing the transaction to fruition.

“We will work with the existing management and the AA's loyal workforce to deliver an enhanced experience for all our members and customers, and to serve the broader needs of the UK motorist. Our offer will enable the AA to become an independent publicly-listed company and we look forward to creating substantial value for all our stakeholders."

Chris Jansen, chief executive officer said:"We are delighted that we have seen such strong demand for shares in AA plc. It is no doubt driven by a combination of the core strengths of the business and the expectation of what we can do with the business in the future. Everyone at the AA is delighted that we will soon be a public company and we are all looking forward to the next chapter in our 109 year history."