Flybe Group has confirmed that one of its largest shareholders, Hosking Partners LLP, has indeed moved to have current chairman Simon Laffin dismissed and to have the proposed sale of flybe. (BE, Exeter) and other company assets to the Connect Airways consortium investigated.

The group said in a London Stock Exchange (LSE) filing on Monday, January 28, that Hosking Partners LLP had called for a general meeting to consider resolutions to replace Laffin with Eric Kohn who would then be tasked with investigating the sales process from November 14, 2018 to January 15, 2019.

"The Board reaffirms that it has acted at all times in the interests of its shareholders and all its stakeholders, through an extremely difficult and challenging period," Flybe Group said. "The Board continues to have full confidence in its Chairman, Simon Laffin, and believes that any independent scrutiny of its conduct will support the Board's decision-making."

Connect Airways, a consortium whose shareholders include Virgin Atlantic, Stobart Group, and another private equity firm - Cyrus Capital, had originally intended to acquire all of Flybe's shares for approximately GBP2.2 million pounds (USD2.83 million). The offer had valued each of the airline's 216,656,776 shares at GBP0.01 per share, far below that of its trading value.

However, following complications with the extension of a bridging loan, the consortium then submitted a revised offer in which it then sought to simply acquire flybe. (BE, Exeter) (including Flybe Aviation Services Ltd) and the digital company Flybe.com Ltd for GBP2.8 million (USD3.61 million) effectively leaving Flybe Group as a shell.

In addition, the Group's move from a premium to a standard listing on the LSE on January 17 also negated the need for it to seek shareholder approval for the transaction.

In a statement to ch-aviation, a Hosking Partners spokesman said it had serious concerns regarding the decline in value of Flybe in recent months and that several other competing offers had been rejected in favour of Connect Airways.

"Those concerns centre firstly on the Board’s agreement to dispose of the Group’s operating business, ostensibly as a distressed sale, and without shareholder approval," he said.

"They also centre on the Board’s handling of the Formal Sale Process, in the course of which the public documents suggest that bidders breached their confidentiality obligations, joining forces and apparently excluding alternative bidders. Having declined an offer at over GBP0.40 (USD0.53) from Stobart Group last year, the Board is now recommending shareholders accept a cash offer at a penny a share. We are determined to put in place a rigorous and experienced board member in Eric Kohn to establish the facts.”