RAC shelves London float as owners opt for continuation vehicle

The RAC, Britain's oldest breakdown recovery service, is shelving plans for a multibillion pound London stock market listing in favour of a deal that will see two of its three shareholders offloading their stakes in a private transaction.

Sky News has learnt that the RAC and its investors have commenced work on a so-called continuation vehicle which will involve CVC Capital Partners remaining an investor in one of the UK's best-known motoring services brands.

The RAC's other shareholders - Singaporean state investment fund GIC and Silver Lake Partners - are in advanced talks to sell their stakes to CVC and other investors, according to people close to the discussions.

One of them cautioned that it was "not a done deal".

If successfully completed, the shake-up will delay a London stock market debut for the RAC by at least 18 months and probably longer, they added.

That would underline the growing trend for larger privately held companies to remain unlisted for longer, reflecting the wall of private capital available to finance deals, bankers said on Tuesday.

Although a listing on the UK market remains a serious medium-term option for the company, the decision by the RAC's shareholders will inevitably be depicted as a blow to the London Stock Exchange, which has been struggling to attract sizeable initial public offerings (IPOs).

That is likely to mean that after months of anticipation of both the RAC and its major competitor, the AA, floating in London, public market investors may now have access to neither company in the near term.

Last month, Sky News revealed that Allianz, the German insurance giant, was one of a small number of bidders circling the AA with a view to a £5bn offer for the company.

Those discussions are thought to be ongoing.

The RAC was founded in 1897 as the Automobile Club of Great Britain and is one of the UK's most recognisable consumer brands.

It is chaired by the former Debenhams chief Rob Templeman and run by chief executive Dave Hobday.

The valuation of the RAC in the continuation vehicle process is unclear, with insiders guiding away from the figure of £5bn mooted for an IPO earlier this year.

CVC has been a shareholder in the RAC since 2015, when it acquired rival buyout firm Carlyle's stake in the company.

The RAC's recent operating and financial performance has seen significant momentum, with memberships increasing to 15.9 million during the first half of this year from 15 million a year earlier.

Revenue increased by 6% to £436m with earnings before interest, tax, depreciation and amortisation rising 12% to £170m.

"RAC enters the second half of 2026 with strong momentum and is well positioned for sustainable growth," the company told bondholders last month.

"The group has increased memberships and total annual recurring revenue, expanded margins and continued to improve efficiency through disciplined pricing, digital investment and operational execution.

"Together with strong cash generation and reducing leverage, this supports confidence in the outlook for the remainder of 2026 and in delivering a 15th consecutive year of EBITDA growth."

Lazard, the investment bank, is advising on the continuation vehicle.

(c) Sky News 2026: RAC shelves London float as owners opt for continuation vehicle