AA..L Regulatory News (AA.)

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

THIS ANNOUNCEMENT IS AN ADVERTISEMENT AND NOT A PROSPECTUS OR A PROSPECTUS EXEMPT DOCUMENT AND AA SHAREHOLDERS SHOULD NOT MAKE ANY DECISION IN RELATION TO THE TOPCO B PREFERENCE SHARES AND/OR TOPCO B ORDINARY SHARES EXCEPT ON THE BASIS OF THE INFORMATION TO BE CONTAINED IN THE SCHEME DOCUMENT WHICH IS PROPOSED TO BE PUBLISHED IN DUE COURSE

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

1 December 2020

On 25 November 2020, the boards of Bidco and the AA issued an announcement (the "Offer Announcement") that they had reached agreement on the terms of a recommended offer for the entire issued and to be issued ordinary share capital of the AA (the "Recommended Acquisition").

In accordance with Rule 2.10 of the Code, Bidco stated in the Offer Announcement that it had received support for the Acquisition from AA Shareholders interested in a total of 96,484,690 AA Shares, representing, in aggregate, approximately 15.5 per cent. of the AA's ordinary share capital in issue on 24 November 2020 (being the last Business Day prior to the date of this announcement).

In addition to irrevocable undertakings from AA Directors who hold AA Shares and Davidson Kempner European Partners, LLP ("DK"), this support included a letter of intent from DK to close out certain derivatives in which it was interested in respect of a total of 75,728,902 AA ordinary shares ("AA Shares") and to seek to acquire an equal number of AA Shares and, if DK acquired any AA Shares as a result thereof, to provide an irrevocable undertaking to vote in favour of the Scheme (or accept a Takeover Offer) on the same terms and subject to the same conditions as those set out in the irrevocable already given by it. 

Following the Offer Announcement, Bidco is pleased to announce that this letter of intent has since been fulfilled (and has consequently ceased to apply) as Bidco has now received an additional irrevocable undertaking from DK in respect of 75,728,902 AA Shares (the "Second DK Irrevocable Undertaking").

Together with the irrevocable undertakings included in the Offer Announcement, Bidco now holds irrevocable undertakings in respect of the Acquisition from AA Shareholders interested in a total of 96,484,690 AA Shares, representing, in aggregate, approximately 15.5 per cent. of the AA Shares on 30 November (the latest practicable date before this announcement).

The Second DK Irrevocable will continue to be binding if a higher competing offer is made for the AA, and will only cease to be binding in the following circumstances:

(a) Bidco announces, with the consent of the Panel and before the Offer Document or Scheme Document is published, that it does not intend to proceed with the Recommended Acquisition and no new, revised or replacement Scheme (or Offer, as applicable) is announced by the Bidco in accordance with Rule 2.7 of the Code;

(b) the Scheme (or Offer as applicable) does not become effective, is withdrawn or lapses in accordance with its terms, provided that this paragraph (b) shall not apply:

i. where the Recommended Acquisition is withdrawn or lapses solely as a result of Bidco exercising its right to implement the Recommended Acquisition by way of an Offer rather than a Scheme or vice versa; or

ii. if the lapse or withdrawal is followed within ten (10) Business Days by an announcement under Rule 2.7 of the Code by Bidco (or a person acting in concert with it) to implement the Recommended Acquisition either by a new, revised or replacement scheme of arrangement pursuant to Part 26 of the Companies Act 2006 or takeover offer (within the meaning of section 974 of the Companies Act 2006);

(c) the Scheme (or Offer, as applicable) does not become effective or wholly unconditional on or before the longstop date for the Scheme (or Offer, as applicable) as set out in the Offer Announcement or such later date as may be agreed in writing by Bidco and the Company (with the Panel's consent and as the Court may approve (if such approval(s) are required)); or

(d) a competing offer for the Company (implemented as a scheme of arrangement or an offer) becomes or is declared unconditional in all respects or otherwise becomes effective.

Unless the context otherwise requires, defined terms used in this announcement shall have the meanings given to them in the Offer Announcement. Appendix III of the Offer Announcement contains a summary of the irrevocable undertakings and letters of intent received by Bidco in relation to the Acquisition as at the time at which the Offer Announcement was made. 

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 and the Second DK Irrevocable Undertaking will be made available, subject to certain restrictions relating to persons resident in Restricted Jurisdictionsons, on the Offeree'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.