AA..L Regulatory News (AA.)

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, IN, INTO ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION

FOR IMMEDIATE RELEASE

24 December 2020

On 25 November 2020, the boards of Bidco and the AA issued an announcement pursuant to Rule 2.7 of the Takeover Code that they had reached agreement on the terms of a recommended cash offer for the entire issued and to be issued ordinary share capital of the AA, to be implemented by way of a court sanctioned scheme of arrangement under Part 26 of the Companies Act 2006 (the "Scheme"). The circular relating to the Scheme was published on 17 December 2020 (the "Scheme Document").

Capitalised terms in this announcement, unless otherwise defined, have the same meanings given to them in the Scheme Document.

On 25 November 2020 Bidco entered into: (i) a commitment letter (the "Initial Commitment Letter") concerning the debt financing facilities described below with Barclays Bank PLC, Credit Suisse International, Goldman Sachs International and Lloyds Bank Corporate Markets plc as mandated lead arrangers and Barclays Bank PLC, Credit Suisse International, Goldman Sachs Lending Partners LLC and Lloyds Bank Corporate Markets plc as underwriters; and (ii) an engagement letter (the "Initial Engagement Letter") concerning the Permanent Securities (as defined below) with Barclays Bank PLC, Credit Suisse Securities (Europe) Limited and Goldman Sachs International and Lloyds Bank Corporate Markets plc as managers (the "Original Managers").

On 24 December 2020, Bidco entered into: (i) an amended Commitment Letter (the "Amended Commitment Letter", and together with the Initial Commitment Letter, the "Commitment Letter") pursuant to which Bidco appointed Banco Santander S.A., London Branch, BNP Paribas, London Branch, Citibank N.A., London Branch and J.P. Morgan Securities plc as additional mandated lead arrangers and Banco Santander S.A., London Branch, BNP Paribas, London Branch, Citibank N.A., London Branch and JPMorgan Chase Bank, N.A., London Branch as additional underwriters; and (ii) an amended engagement letter (the "Amended Engagement Letter" and, together with the Initial Engagement Letter, the "Engagement Letter") with the Original Managers and J.P. Morgan Securities plc and Citigroup Global Markets Limited, as additional managers.

Under the terms of the Commitment Letter, the mandated lead arrangers agreed to arrange and the underwriters agreed to underwrite certain bridge loans, term loans, working capital facilities and liquidity facilities (together, the "Long-Term Facilities"). The Commitment Letter and the Engagement Letter include an ability to transfer, assign, novate, sub-participate, sub-contract or other similar arrangements. The Commitment Letter contemplates that additional mandated lead arrangers and/or additional underwriters may also be appointed.

Under the terms of the Initial Commitment Letter, the mandated lead arrangers and the underwriters party thereto had agreed to arrange and underwrite (as applicable) a backstop term facility in an aggregate principal amount of up to £82,000,000 (the "Backstop Facility"), consisting of: (i) a sterling tranche in an aggregate principal amount of £62,000,000 the purpose of which was to backstop, in part, the existing term facility of the AA Group; and (ii) a sterling tranche in an aggregate principal amount of £20,000,000 the purpose of which was to backstop, in part, the existing working capital facility of the AA Group. As a result of the increased commitments under the Bidco Senior Term Facility and Bidco Working Capital Facility secured pursuant to the Amended Commitment Letter, the Backstop Facility will not be required and the Long-Term Facilities will therefore comprise of the Bidco Senior Term Facility, the Bidco Working Capital Facility, the Bidco Liquidity Facility and the Secured Bridge Facility only.

Bidco also entered into an amended Bridge Fee Letter (the "Amended Bridge Fee Letter") and an amended Loan Fee Letter (the "Amended Loan Fee Letter") on 24 December 2020, each of which have been updated to reflect the changes under the Amended Engagement Letter and the Amended Commitment Letter in addition to certain other consequential amendments.

Copies of the Amended Engagement Letter, the Amended Commitment Letter, the Amended Bridge Fee Letter and the Amended Loan Fee Letter will be made available, subject to certain restrictions relating to persons resident in Restricted Jurisdictions, on the Offeree's website at https://www.theaaplc.com/investors.

FURTHER INFORMATION

Credit Suisse International ("Credit Suisse") which is authorised by the Prudential Regulation Authority and regulated in the UK by the Financial Conduct Authority and the Prudential Regulation Authority, is acting exclusively for Bidco and no one else in connection with the Offer and will not be responsible to anyone other than Bidco for providing the protections afforded to clients of Credit Suisse or for providing advice in connection with the Offer or any matter referred to herein.

Goldman Sachs International ("Goldman Sachs") which is authorised by the Prudential Regulation Authority and regulated in the UK by the Financial Conduct Authority and the Prudential Regulation Authority, is acting exclusively for Bidco and no one else in connection with the Offer and will not be responsible to anyone other than Bidco for providing the protections afforded to clients of Goldman Sachs or for providing advice in connection with the Offer or any matter referred to herein.

Barclays Bank PLC, acting through its investment bank ("Barclays") which is authorised by the Prudential Regulation Authority and regulated in the UK by the Financial Conduct Authority and the Prudential Regulation Authority, is acting exclusively for Bidco and no one else in connection with the Offer and will not be responsible to anyone other than Bidco for providing the protections afforded to clients of Barclays or for providing advice in connection with the Offer or any matter referred to herein. This announcement contains inside information.

This announcement is for information purposes only and does not constitute an offer to sell or an invitation to purchase any securities or the solicitation of an offer to buy any securities, pursuant to the Offer or otherwise. The Offer will be made solely by means of a Scheme Document, which will contain the full terms of and conditions to the Offer, including details of how the Offer may be accepted.

This announcement has been prepared for the purpose of complying with English law and the Code and the information disclosed may not be the same as that which would have been disclosed if this announcement had been prepared in accordance with the laws of jurisdictions outside the United Kingdom.

Overseas Shareholders

The release, publication or distribution of this announcement in certain jurisdictions may be restricted by law. Persons who are not resident in the United Kingdom or who are subject to other jurisdictions should inform themselves of, and observe, any applicable requirements.

The Offer relates to shares of a UK company and is proposed to be effected by means of a scheme of arrangement under the laws of England and Wales. A transaction effected by means of a scheme of arrangement is not subject to proxy solicitation or tender offer rules under the US Securities Exchange Act of 1934, as amended. Accordingly, the Scheme is subject to the disclosure requirements, rules and practices applicable in the United Kingdom to schemes of arrangement, which differ from the requirements of US proxy solicitation or tender offer rules. However, if Bidco were to elect to implement the Offer by means of a takeover offer, such takeover offer will be made in compliance with all applicable laws and regulations, including US tender offer rules, to the extent applicable.

Unless otherwise determined by Bidco or required by the Code, and permitted by applicable law and regulation, the Offer will not be made, directly or indirectly, in, into or from a Restricted Jurisdiction where to do so would violate the laws in that jurisdiction, and the Offer will not be capable of acceptance from or within a Restricted Jurisdiction. Accordingly, copies of this announcement and all documents relating to the Offer are not being, and must not be, directly or indirectly, mailed or otherwise forwarded, distributed or sent in, into or from a Restricted Jurisdiction where to do so would violate the laws in that jurisdiction, and persons receiving this announcement and all documents relating to the Offer (including custodians, nominees and trustees) must not mail or otherwise distribute or send them in, into or from such jurisdictions as doing so may invalidate any purported acceptance of the Offer.

The availability of the Offer to Offeree Shareholders who are not resident in the United Kingdom may be affected by the laws of the relevant jurisdictions in which they are resident. Persons who are not resident in the United Kingdom should inform themselves of, and observe, any applicable requirements.

If you are a resident of the United States, please read the following:

In accordance with normal UK market practice, Bidco, or its nominees, or its brokers (acting as agents) may from time to time make certain purchases of, or arrangements to purchase, Offeree Shares, other than pursuant to the Offer, before or during the period in which the Offer remains open for acceptance. These purchases may occur either in the open market at prevailing prices or in private transactions at negotiated prices. Any information about such purchases will be disclosed as required in the United Kingdom.

Disclosure requirements of the Code

Under Rule 8.3(a) of the Code, any person who is interested in 1% or more of any class of relevant securities of an offeree company or of any securities exchange offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the offer period and, if later, following the announcement in which any securities exchange offeror is first identified. An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3.30 pm (London time) on the 10th business day following the commencement of the offer period and, if appropriate, by no later than 3.30 pm (London time) on the 10th business day following the announcement in which any securities exchange offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a securities exchange offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.

Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1% or more of any class of relevant securities of the offeree company or of any securities exchange offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any securities exchange offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s), save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 pm (London time) on the business day following the date of the relevant dealing.

If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a securities exchange offeror, they will be deemed to be a single person for the purpose of Rule 8.3.

Opening Position Disclosures must also be made by the offeree company and by any offeror and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4).

Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Takeover Panel's website at http://www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the offer period commenced and when any offeror was first identified. You should contact the Panel's Market Surveillance Unit on +44 (0)20 7638 0129 if you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure.

Publication on Website

A copy of this announcement, the Amended Engagement Letter, the Amended Commitment Letter, the Amended Bridge Fee Letter and the Amended Loan Fee Letter will be made available, subject to certain restrictions relating to persons resident in Restricted Jurisdictionsons, on the AA's website at https://www.theaaplc.com/investors.

For the avoidance of doubt, the contents of this website are not incorporated into and do not form part of this announcement.