The AA has requested more time to continue talks with takeover suitors as the prospect of a bidding war stalled for the debt-laden breakdown firm.
A deadline for potential bidders to make an offer for the company has been extended by 28 days to Sept 29, the former FTSE 250 company announced on Tuesday.
Shares tumbled more than a tenth amid speculation that two of the three bidders have opened discussions about joining forces.
Warburg Pincus is holding preliminary discussions with a consortium led by Centerbridge Partners and Towerbrook Capital Partners, Sky News reported on Monday evening.
Meanwhile, speculation was growing that the third party, Platinum Equity, may not make a bid.
The AA said talks with all three parties "have continued to progress and their due diligence is on-going".
The Telegraph reported on Sunday that another supposedly interested party, US buyout fund Apollo, is understood to be focusing on refinancing some of the AA’s almost £2.7bn debt pile as opposed to making a swoop for its shares.
The spectre of only one bid being lodged poured cold water on a late summer bidding war for the AA.
Jefferies analysts wrote: “With one bidder, limited value in the equity should be the central case.”
The AA shocked the City at the start of August by confirming reports of private equity interest.
The firm floated in 2014 but has struggled to pay down a cumbersome debt pile that dwarfs its stock market value of roughly £200m. The AA revealed alongside the takeover interest that it was “assessing a range of other potential refinancing options”.
Analysts say that the company’s most pressing problem is refinancing more than £550m of bonds that are due to be repaid in 2022.
While the bonds’ maturity date remains more than a year away, market watchers pointed out that the AA would likely want to have the tranche of debt refinanced before the end of the year as auditors increase their scrutiny on signing off annual accounts.