RAC, the roadside recovery group that has been preparing itself for a £2bn flotation in London, is understood to be in takeover talks with GIC, the Singapore sovereign wealth fund.
Sources said last night that RAC’s initial public offering timetable had come to a halt to allow talks to be held between private equity group Carlyle, its owner, and GIC. The wealth fund has close links with Carlyle and has long admired the RAC with its strong cash flows from its 8.2m members.
Earlier this month RAC hired Sir Michael Rake as its chairman in a move that was designed to smooth the way for a flotation that would have included a huge retail offering along the lines of Saga or Royal Mail. Barclays, which is a specialist in handling such big retail issues, was a member of the banking group. It was not clear last night whether discussions over a trade sale would be concluded to everyone’s satisfaction. Carlyle is believed to be keen to retain a stake in the business, City A.M. understands.
In the past, GIC has held large stakes in Citigroup and UBS.
UPDATE: This article has been changed to show GIC does not have a stake in Singaporean investment company Temasek.