Is The Flybe Deal Threatened?

There’s been an awful lot going on in the world of Flybe recently. First, they issued a profit warning, alerting investors that profits will likely be much lower than expected. Following this, the airline put itself up for sale, which prompted interest from British Airways, Virgin Atlantic, and Stobart Air. Following a bidding process, it was announced that a group which includes Stobart Air and Virgin would purchase Flybe for a significantly low price. The sale of the airline, which would become known as Connect Airways is due to be completed on February 22nd. Now, however, it looks as if we could see the Flybe deal threatened.

Flybe Deal Threatened
Flybe will potentially be sold for 1p per share. Photo: Aero Pixels

Trouble In The Air

The deal to purchase Flybe passed through the airline’s board at 0.1p per share. That equates to a total of just £2.2 million for the whole airline. As a result, Flybe is currently receiving short term loans to ensure its continued operation in the interim. However, some of Flybe’s shareholders are less than enthusiastic at how little the airline is to be sold for. As a result of their dissatisfaction, action will be taken against the airline beginning on Monday Morning according to Sky News reports.

Flybe Deal Threatened
A group lead by virgin was set to purchase Flybe. Photo: MercerMJ

Extraordinary General Meeting

Hosking Partners are Flybe’s biggest shareholders. They are also the party looking at what action could be taken to block the Connect Airways deal. Hosking Partners own almost 19% of Flybe and is run by the investor Jeremy Hosking. The firm wants to call an extraordinary general meeting. The aim of this meeting would be to oust Simon Laffin as the Flybe Chairman. Mr Laffin has been Chairman of Flybe for the past five years. Mr Hosking would like to replace Mr Laffin with Eric Kohn, an experienced executive in the aviation industry.

Flybe Deal Threatened
The deal with Connect Airways would see the Flybe fleet being repainted in Virgin Red. Photo: Mark Harkin

Monday Morning Notification

It is expected that a request for an extraordinary general meeting will be made to the London Stock Exchange on Monday morning. Should this go ahead, Hosking Partners will seek to implement Mr Kohn as Chairman of Flybe. In this role, Mr Kohn would lead an investigation into the sale to Connect Airways. This would likely delay proceedings at least. However, it could also potentially threaten the deal that Flybe has made with Connect Airways. Hosking Partners believe the deal to sell Flybe for 1p per share is unfair as the airline reportedly has a significant cash balance, and could sell slots at London airports to raise funds.

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What do you make of Hosking Partners’ plans to block a Flybe deal? Let us know in the comments below!

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Hugh Taylor

The deal looks sus to me – bear in mind and tongue in cheek – “there is NO insider dealing on the Stock market !” LOL – – – – – – so good on Hosking
Behind them 100%

Sean Ayre

Good, Simon Laffin needs removing, and then Christine needs to be removed and investigated for the poor management she has done, if it is found she had pushed the company to the ground then legal action should be taken against her too. I doubt this deal will go ahead in any case. The main question is whether shareholders are willing to stump up cash to keep the airline going?

William Clark

I agree with Sean. Laffin and the lady Christine need to be ousted as soon as possible as they have run this airline into the ground making decisions that just do not make sense. Far too many rotations from regional airports to Southampton and Exeter for example are causing the company to hemorrhage money. Many other routes that are not being evaluated at this time need to be looked at and that ASAP.