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RAC subject of potential buyout offer

RAC says it has received an approach from a potential buyer.

In a statement, the company says: "Further to the recent share price movement, the board of RAC confirms that it has received an approach which may or may not lead to an offer for RAC."

RAC shares surged to a record high of 867 pence following the announcement, before slipping back to 123 pence, or 16.6%, up on the day at 865 by 12:45pm, valuing the business at just over £1 billion.

There has been speculation the potential buyer is insurer Aviva which provides cover to one in seven of the vehicles on the UK's roads through its Norwich Union arm.

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