Flybe takeover faces challenge by shareholders


Ian Taylor ian.taylor@travelweekly.co.uk


Flybe’s acquisition by a consortium including Virgin Atlantic moved rapidly last week, but may hit a bump with leading shareholders potentially seeking to block the takeover.


Virgin Atlantic stepped in as part


of the Connect Airways consortium to save Flybe with Southend airport owner Stobart Group and investment firm Cyrus Capital (Travel Weekly, January 17). Flybe’s board accepted a bid of just one pence per share or £2.2 million for the group plus an immediate loan of £10 million to keep lybe flying and a promise of up to £80 million in investment. The consortium would also take on Flybe’s debts, with Virgin Atlantic owning 30%, Stobart 30% and Cyrus 40%. The takeover terms were amended last week because it had “not been possible to satisfy” conditions attached to what was originally a £20 million loan, leaving Flybe “unable to draw any funds”.


“The auction has clearly not yielded a favourable outcome for all shareholders”


The amended offer also saw the consortium offer an additional £2.8 million for Flybe’s main trading assets, the sale of which does “not require shareholder approval”. However, the acquisition of Flybe


Group still needs shareholder agreement and Flybe’s two biggest shareholders appear ready to block it in pursuit of a better offer. Investment group Hosking


Partners, which holds a near 19% stake, wrote to Flybe’s directors last week saying: “The auction undertaken under the formal sale process has not yielded a favourable outcome for all stakeholders and it seems the outcome has locked out any other bidder.” Hosking was reported to be considering an injunction to halt the takeover. The estranged former boss of Stobart Group, Andrew Tinkler,


AILING: Flybe’s two biggest shareholders could put a stop to the consortium’s takeover


also acquired a 12% stake in Flybe last week, making him the second-largest shareholder after paying four times the price of the takeover offer for the shares. Tinkler is involved in litigation


with Stobart, which sued the former chief executive over allegations relating to Stobart’s earlier bid to buy Flybe last February. He has denied Stobart’s claims. Tinkler insisted: “My investment


in Flybe has nothing to do with the ongoing dispute with Stobart Group.” But he added: “Flybe is an important part of the UK economy. I have huge faith in the potential of this business if it is provided with the right stakeholder support.” Flybe was put up for sale in


mid-November after issuing a profit warning in October. As recently as December, Flybe had a


market value of £43 million. › Talk Back, page 21


Delta defies fuel bill hike to post a $5.2bn profit


Virgin Atlantic shareholder and partner Delta Air Lines reported a reta rofit o . illion or  desite the arriers annual fuel bill rising by more than  illion year on year. elta hie eeutie d astian said the  arrier oerae aroiately  o the  illion inrease in uel eense in the year. elta reorted a reta rofit


o . illion or the three months to December alone. The carrier’s business cabin


and premium products saw a 14% rise in revenue, against a 4% increase in economy. Delta’s revenue is driven by its domestic US operations, which ontriuted  o assenger revenue in the fourth quarter of . he arriers transatlanti operations contributed 14%.


The ‘party could be ending’ for air traffic growth in Europe


European airport association ACI Europe reported aviation demand “defying an increasingly challenging environment”, but warned “the party could be ending”. ACI Europe director-general Olivier


anoe identified a nodeal reit as the most immediate risk” as the association released assenger figures or oeer showing a 6.4% increase in monthly trafi year on year. oweer  noted a . deline in reight trafi  the first


monthly slowdown in three years. Jankovec said: “Demand on the passenger


side keeps defying an increasingly challenging geopolitical and economic enironent. ut the arty ould e ending soon. We face a eurozone close to stagnation with usiness onfidene at a ouryear low, coupled with global growth losing momentum and a slowdown in trade.” e warned assenger deand leels are going to feel the effects at some point.”


anoe said  nodeal reit is the


most immediate risk. We are faced with the prospect of a capacity freeze on all UK-EU air routes. UK airports would be the hardest hit, but many EU airports would suffer, especially in Ireland and Spain, as well as smaller regional airorts that deend on  trafi. In a letter to the EU, Iata warned that russels lan to a  flight aaity at the urrent leel i there is a nodeal reit will reate signifiant disrution.


24 January 2019travelweekly.co.uk87


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