A consortium led by Richard Branson’s Virgin Atlantic and Stobart Group has agreed an offer to take control of Exeter based airline Flybe, valuing it at £2.2 million.
The board of Flybe has recommended the offer of 1p per share, which represents a significant markdown on the company’s Thursday closing price of 16.38p.
The consortium, which also includes Cyrus Capital Partners, will form a joint venture called Connect Airways which will combine Flybe with Stobart Airways.
Cyrus will own 40% of the new company, while Virgin and Stobart will take 30% apiece.
It will also provide a £20 million bridge loan to Flybe and £80 million of further funding to the combined group.
Flybe chief executive Christine Ourmieres-Widener said the firm had been forced to seek a buyer due to higher fuel costs, currency fluctuations and Brexit uncertainty.
By combining to form a larger, stronger, group, we will be better-placed to withstand these pressures. We aim to provide an even better service to our customers and secure the future for our people.
– Christine Ourmieres-Widener, Flybe CEO
Flybe is Europe’s largest regional airline, and flies more UK domestic flights than any other airline.
It currently operates 192 routes serving 14 countries from 75 departure points in the UK and Europe, with a fleet of 76 aircraft.