Flybe Group has confirmed a takeover offer was submitted on Tuesday, February 19, by a consortium of US-based interests.
The firm said in a stock market filing that the offer, which it deemed "preliminary and highly conditional", had been submitted by a group of investors led by New York-based private equity firm Bateleur Capital LLC and Arizona-based capacity provider Mesa Air Group, with support from former Stobart Group chief executive Andrew Tinkler and other un-named institutional shareholders.
The offer included a capital injection and replacement of funding provided by the Connect Airways consortium, the Flybe Group board's preferred bidder, whose members include Virgin Atlantic, Stobart Group, and private equity firm Cyrus Capital.
The Group said the Bateleur/Mesa offer was conditional on, and subject to, a significant number of items, in particular, that it retains ownership of its flybe. (2002) (Exeter) (including Flybe Aviation Services Ltd) and Flybe.com Ltd digital company assets. However, the Group said this would not be possible given it was bound by the terms of a share purchase agreement wherein Connect Airways will acquire the three entities for GBP2.8 million (USD3.61 million).
Other requirements include the offer securing UK Civil Aviation Authority (CAA) consent and agreements being reached with Flybe's credit card acquirers, banks, lessors, OEMs and pension fund trustees. Furthermore, a key aspect of the new proposal is that it requires the publication of a prospectus and the passing of a "whitewash" resolution by Flybe's independent shareholders i.e. that they waive their rights to a mandatory takeover from the Bateleur/Mesa consortium for the Flybe Group ordinary shares that they do not already own or control.
Flybe Group said it had already drawn down on the first GBP15 million (USD19.57 million) of a GBP20 million (USD26.1 million) credit facility extended to it by Connect Airways with repayment due by February 22. In addition, arrangements with Flybe's credit card acquirers and banks are critical to the airline being able to continue to trade and are conditional themselves upon Connect Airways acquiring control of the carrier as a whole.
As such, Flybe's board said the Bateleur/Mesa offer was not doable given the timeframe required to enable Flybe to continue to trade.
"The Board emphasises to shareholders that it continues to regard the arrangements entered into with Connect Airways as being the only viable option available to the Company which provides the security that the business needs to continue to trade successfully," it said adding that the Connect Airways offer would preserve the interests of Flybe's stakeholders, customers, employees, partners and pension scheme members.
