James Ashton: AA - look under the bonnet before buying

Given the flop that was the Saga flotation, you might think the owners of its AA sister company should try flagging down investors from a motorway layby rather than pursuing the more traditional route of touring City pension funds.

At the very least, private-equity backers Charterhouse, CVC and Permira, who failed to sell a single share in Saga, should pause to reflect about what exactly went wrong instead of attempting a second dash for the exit.

The Saga float really was breathtakingly bad. A strong brand, experienced management and enthusiastic retail demand meant that the cruise-ship operator should have had champagne broken on its bow.

Instead, strenuous efforts to persuade the City that the company really isn’t an insurer — it largely is — and a fumbled pricing have left the shares holed below the waterline

Granted, the AA is a different beast. But it is also one that has been loaded with debt and spent a decade in private-equity hands.

For all the talk of investors revving up, it is worth a close look under the bonnet before handing any cash to these extremely careful owners.