RAC owner 'receives £1bn informal offer from CVC'

Private equity firm CVC has approached one of the owners of RAC offering £1bn in return for a stake in the car insurance and roadside assistance provider, it was reported over the weekend.

"Very early stage" discussions between CVC and Carlyle have taken place, according to senior City sources cited by the Sunday Times, although there was no certainty that this would lead to a formal bid.

If a successful offer took place, CVC would be likely to keep hold of the stake for a number of years, with the investment being made through a long-term fund, the insiders said, almost certainly ruling out a listing of the group.

The sources also claimed several approaches had been received by Carlyle over the past 12 months, and that while a flotation could still be on the cards, the unimpressive performance by peer AA had made the option less appealing.

The reports come just over a year after Carlyle announced it was selling a significant portion of its holding to Singapore sovereign wealth fund GIC.