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