Lex takes over RAC for £437m

By DAILY MAIL REPORTER
Updated:

 

Snapping up the Royal Automobile Club's breakdown business is the high-octane deal that car leasing group Lex Service has been looking for.

The £437m takeover sent its shares roaring ahead 93p to 587 1/2p, adding £180m to its stock market value.

In October they were languishing at 331p on worries that car sales were going to hit a brick wall. Since then chief executive Andrew Harrison has expanded the vehicle leasing business and taken Halifax as a partner.

But buying the RAC and beating off rival bidders - thought to include Prudential, gas supplier Centrica and Japanese bank Nomura - is his biggest coup.

Not only does it give Lex access to the 6m motorists who use RAC roadside assistance, but also insurance, traffic information services and its BSM driving schools.

Last year RAC made £25m profit before tax and exceptionals.

Harrison plans to put Lex's motoring services arm - including 147 repair centres, six used car outlets and motor finance - under the RAC banner. The Lex name will be retained for its car leasing and fleet management business.

Motorists who use RAC roadside assistance miss out on the £34,000 windfalls available to full members, but 4,000 RAC staff will receive up to £1,000 each.

Defeated bidders may now turn their attention to RAC's arch rival AA. Ford, which recently snapped up Kwik-Fit for £1bn, is also said to be interested.

Trafficmaster, which jointly runs the RAC's information service, rose 77 1/2p to 1460p.

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