Flybe shareholder ‘threatens legal challenge’ to Virgin takeover bid
One of Flybe’s shareholders is threatening a legal challenge over the £2.2m Virgin-led buyout, according to reports.
Hosking Partners, which owns nearly 19% of the airline, is considering obtaining an injunction prohibiting the deal from being completed, according to Sky News.
Sky said it has seen details of a letter to Flybe directors from Hosking Partners expressing concern that they had allowed a false market in the company’s shares to develop by failing to update the City on its financial position in a timely fashion.
Hosking is said to have raised doubts as to whether the £2.2m offer reflected the intrinsic value of Flybe, and alleged that the handling of its proposed sale had blocked a rival offer from emerging at a higher price.
Hosking and other shareholders are also said to be ‘furious’ after the consortium, called Connect, said it was restructuring the sale agreement last week.
Flybe issued a statement saying: "The board of Flybe was faced with a very tough decision based on Flybe’s current difficult liquidity position and the expectation that this pressure will continue.
"Obtaining the revised facility, as announced on 15 January, from the consortium provides the security that the business needs to continue to trade, which preserves the interests of its stakeholders, customers, employees, partners and pension members.
"Flybe will be responding directly to letters received from shareholders."
Hosking Partners did not comment on the contents of its letter, but said investors were ‘entitled to transparency over precisely what has gone on to drastically reduce Flybe’s value’.
"The auction undertaken under the formal sale process has clearly not yielded a favourable outcome for all stakeholders, and it seems that the outcome has locked out any other bidder who may be able to provide a better solution for all of Flybe’s stakeholders," the statement added.
Lisa
Lisa joined Travel Weekly nearly 25 years ago as technology reporter and then sailed around the world for a couple of years as cruise correspondent, before becoming deputy editor. Now freelance, Lisa writes for various print and web publications, edits Corporate Traveller’s client magazine, Gateway, and works on the acclaimed Remembering Wildlife series of photography books, which raise awareness of nature’s most at-risk species and helps to fund their protection.
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