AA and Hastings confirm summer talks over insurance tie-up have ended

 
Oliver Gill
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Source: AA

Investors in both AA and Hastings reacted positively this morning to a confirmation the duo both had held, and no longer were holding, talks over a possible tie-up.

AA shares rose by 2.5 per cent while Hastings increased by one per cent.

Discussions over spinning-off AA's insurance division and partnering with FTSE 250 insurer Hastings took place over the summer, around the time AA sacked its chairman Bob Mackenzie for what the firm called a "personal conduct-related matter".

Read more: AA row: Bob Mackenzie's son says his father resigned due to ill health

This morning, Hastings said it "did have preliminary discussions with the AA regarding a potential partnership with its insurance division, which have ceased".

In a separate statement, AA said it "regularly reviews all strategic options, including whether a spin-off of any of its business lines would unlock further value and be in its shareholders' interests".

We confirm that we did have preliminary discussions with Hastings in early summer to explore a possible combination of the AA's insurance business with Hastings.

The announcements come after the Financial Times reported it was spin-off talks that prompted a violent exchange between Mackenzie and AA insurance chief Michael Lloyd at Pennyhill Park Hotel in Surrey.

Read more: Hastings boss: Hopes dashed of a swift resolution to discount rate debacle

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