Flybe shares dive after Stobart Group abandons bid for airline
PUBLISHED: 10:02 22 March 2018 | UPDATED: 10:02 22 March 2018
Flybe has seen its shares plummet after a takeover bid by the owner of London Southend Airport fell through.
Stobart Group has said it was “not intending to make an offer” for the regional airline, which runs flights from Norwich Airport, after failing to agree “satisfactory terms” with the carrier’s board.
Last month shares in Flybe rocketed when Stobart said it was weighing a potential approach – but were down 25% on Thursday morning when the group announced it was pulling out.
In a statement Stobart said: “Further to the announcement made by Stobart Group on February 22 2018, Stobart Group and Flybe have been unable to reach agreement on satisfactory terms.
“The board of Stobart Group has determined that it is not in its shareholders’ best interests to increase its latest proposal for Flybe above the level which was rejected by the board of Flybe.”
Stobart, whose operations span infrastructure, energy and aviation, was eyeing a tie-up as it searches out “alternative structures” for its airline and leasing business.
Flybe has been grappling with an IT overhaul and efforts to drive down costs.
Stobart Group and Flybe already work together and have a franchise arrangement between the two groups’ airlines and they intend to continue a “collaborative working relationship” despite the takeover fallout.
Flybe said in a statement: “The board of Flybe notes the announcement by Stobart Group Limited withdrawing its approach regarding a possible offer for Flybe.
“The board remains highly confident in the prospects of Flybe and believes that the group continues to have an exciting future as an independent company, delivering the Sustainable Business Improvement Plan as set out in June 2017.
“This plan is focused on driving sustainable profit and cash generation and will see the fleet size reduce to an optimum level for the number of identified profitable routes and make the business demand-driven rather than capacity-led.”
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