Members anticipate windfall as AA considers shedding mutual status

The Automobile Association could be sold for around £1.5 billion sterling (€2.3 billion), triggering windfalls for millions of members, including the bulk of the organisation's 185,000 members in the Republic.

The AA's mutually-owned structure is under debate and reports in Britain have said that both Ford and motor leasing group Lex Service were interested in buying it. Such a sale would result in windfalls of between £150 and £200 for each of its 4.3 million personal members.

Most of the AA's Irish members would qualify for the payout in the event of demutualisation as they are full members rather than associates. But a small portion are fleet members and these are not expected to qualify.

In a statement, Britain's biggest motoring organisation said: "The AA has always kept an open mind about its structure as it pursues its prime purpose: to serve the best interests of its members. No decisions have been made in this respect."

But AA director general, Mr John Maxwell is reported to be considering shedding the organisation's mutual status under which it is owned by its members. This would follow in the footsteps of its arch rival, the Royal Automobile Club, which ended its mutuality last year.

A sale of the RAC for £450 million to Cendant of the US was blocked by the British government, so the organisation is now looking to sell off its breakdown rescue business.

Other recent shifts in the breakdown industry have piled more pressure on the AA to change its structure in order to become bigger and more competitive.

Cendant bought AA rival Green Flag, while insurance group Direct Line also entered the market.

The AA statement said: "It is understandable, following the dramatic changes in the breakdown assistance market in the last year, that speculation should rise. "However, the AA will not comment on speculation but is focusing on the strategy that it launched at the beginning of 1998, to be the motorists' organisation, delivering pre-eminent service to its members and customers. This will not change."

Ford and Lex Service both refused to comment.

At a meeting in February, the AA passed a motion ensuring that its full members would be given a vote in the event of any plans to accept a takeover offer or to float the business on the stock market.

Its 1.7 million associate members and 3.5 million fleet vehicle members will not be allowed to vote and will not receive windfalls if a sale or flotation goes ahead.