AS businesses go, AA and Saga have much in common.
Both are old affairs – the AA goes back 115 years, Saga 70. Which is about the average age of the customers.
A marriage of the two ended when Saga sought divorce and listed itself on the London Stock Exchange six years ago at 185p a share.
Things have not gone well for either party since with Saga’s stock now at 19p, but there remains hope of happier times ahead.
The loyalty the brands inspire is a great strength. They provide solid income streams and if they can deal with their debts would have a better than average chance to motor away from the Covid crisis.
Both are also subject to private equity bids, but here the approach differs.
Saga has told its American bidders to move on, preferring to bet on a cash call led by former chairman Sir Roger De Haan, the son of the founder, and the leadership of chief executive Euan Sutherland. Sutherland’s track record at Superdry and the Co-op is patchy, but we wish him well.
At a positively youthful 51, perhaps his time has come.
AA meanwhile is running a dual process. It is happy to see if the interest from private equity turns into something solid and is asking the Takeover Panel for an extension to the usual takeover deadlines. It is also pursuing its own debt refinancing in case that turns out to be the better deal.
As the older business, perhaps it isn’t coincidence that AA’s approach seems more adult.
Saga painted the bids it has received as highly conditional as it moved to dismiss them, but that seems to suit Sir Roger more than other shareholders, who face significant dilution under his terms as opposed to a premium from private equity.
A third of those shareholders are customers who have come to the shares via the AA. They might appreciate the chance to have their say on the future of a business in which they are invested in more ways than one.
If older brother AA can run a dual process, why can’t its younger sibling do the same?
The Saga saga should turn onto a dual carriageway.