Wednesday, September 8, 1999 Published at 14:22 GMT 15:22 UK
Business: The Company File
AA members' votes go in
AA members are to receive £240 if the deal goes through
AA members' votes on the proposed sale to gas supplier Centrica have gone in, with the results of the vote to be announced September 20.
At least two thirds of those who vote must be in favour of the deal for it to go ahead. If it gets the nod, members stand to receive windfalls of up to £240 each.
Members will have a last chance to vote in person at special general meeting on 16 September, where an indication of the results of the postal vote may be given, an AA spokeswoman said.
Of the AA's 9.5m members, only 4.5m members are eligible to vote for £1.1bn offer which the board has recommended.
Those who pay the top rate of income tax will be liable to a charge on their windfall of 25 pence in the pound, reducing the payment by £60 to £180.
AA members received voting packs in the past few weeks, outlining the benefits of the sale going ahead, the spokeswoman added. "There has been an extensive advertising campaign," she said, declining to say how much the AA has spent on this.
Some AA members have complained that some of the official information provided has been weighted in favour of the sale. Critics of the sale point out that members may have to pay higher rates if the sale goes ahead.
Advocates of the sale say it will allow the AA to retain its competitive edge.
The AA has had to make job cuts over the past year, and in June it posted annual losses of £21.7m.
The deal is expected to be completed in the last quarter of the year and would create savings of at least £85m per year by 2002.
AA's financial services and insurance business will be incorporated into Centrica's own.
In Centrica, the AA has a partner which it says could help it face down competition from the Royal Automobile Club.
The AA has a 48% share of the roadside breakdown market, while its main competitor, the RAC, is about half the size of the AA in terms of revenue and market share.
Earlier this year, the RAC was sold to vehicle leasing group Lex Service for £437m.
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