September 23, 2012 / 2:50 PM / in 5 years

AA owners hire Ernst & Young to value business-source

LONDON, Sept 23 (Reuters) - The owners of the AA have hired accountants Ernst & Young to begin work on valuing the 107-year-old motoring services company, a source familiar with the matter told Reuters, in a process that could lead to a sale or flotation.

Private equity-backed company Acromas has appointed Ernst & Young to carry out pre-sales due diligence for the AA as a separate entity, as well as assessing the value of Saga, the over-50s insurance company and travel agent, which is also owned by Acromas, the Sunday Telegraph newspaper reported.

The process could see the AA eventually sold or floated on the stock market as a standalone company for as much as 5 billion pounds ($8.1 billion), the paper said.

Debt-burdened Acromas was formed in 2007 through a 6.1 billion pound merger of AA and Saga. A sale or flotation would allow the group to return cash to its private equity backers, including Charterhouse and CVC and Permira.

Acromas declined to comment on whether it has hired Ernst & Young.

“There are no plans to float the business or sell any part of it,” a spokesman for the company said.

“We keep all options open but we are focused on continuing to drive both Saga and the AA forward. We do consider the future of the business in the round, but we are in no rush to reach a decision.”

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