Ever since a sale was first announced in XYZ, Flybe has been a hot topic. With the airline little over a week away from being completely sold, it’s finally looking as though it may go ahead despite opposition from a key shareholder. However, Simple Flying looks at whether the deal will still go ahead.
Since Flybe issued a profit warning back in October, there have been questions as to Flybe’s financial security. Then in mid-November, the airline placed itself up for sale. Now the sale is almost complete, and it looks as though it may finally go through.
Who Is Buying Flybe?
A new entity called Connect Airways is set to purchase Flybe. While Connect is a new entity, it won’t lack experience. The new airline is a joint venture between Stobart Air and Virgin Atlantic. Virgin Atlantic is the muscle behind the operation, operating a successful long haul airline. Stobart Air, on the other hand, is providing regional expertise.
Coincidentally, Stobart Air already plays a big part in Flybe’s operations. They operate some of Flybe’s services under a wet lease agreement, while another portion is also operated under a franchise agreement.
Opposition To The Deal
The deal to sell Flybe to Connect has come under some fire. Largely from Flybe shareholders. Flybe is set to be sold at a cost of 0.1p per share. This roughly equates to a total price of £2.2 million. Hosking Partners, who own almost 19% of Flybe, are unhappy with this price. They believe that the airline could be sold for much more.
Unfortunately, however, they have very little say in the matter. Toward the end of last year, Flybe changed its stock market listing from Premium to Standard. This means that shareholder approval is not required for the business to sell its assets as it is doing.
Shareholders do, however, have the opportunity to vote on the sale of the company which will take place on 4th March. This is unlikely to be opposed at this stage, as voting against the sale would likely result in the “shell” company being liquidated. This would lead to investors losing their investments.
Sale Due To Proceed
Simple Flying reached out to representatives of Virgin Atlantic, Stobart Air, and Flybe. While Virgin Atlantic and Stobart Air were unable to comment, Flybe did issue a statement. A Flybe representative told Simple Flying: “The sale of the trading businesses to Connect Airways, which is due to complete by 22 February, was the only way to enable the business to continue to trade and to protect the interests of all relevant stakeholders.”
The representative went on to address the displeasure of some shareholders, stating: “We fully understand this has been a very disappointing outcome for shareholders and this was not a decision we took lightly, but was one that was necessary to discharge our obligations in the interests of all relevant stakeholders.”
Do you think the sale of Flybe tomorrow will go ahead? Let us know in the comments down below!