Flybe Confirms Virgin Atlantic Talks, Shares Soars

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On Saturday morning, the shares of Flybe, a struggling low-cost airline, soared by 23 percent as it confirmed the reports that Virgin Atlantic is in negotiations to acquire the company.

It was reported by Sky News last Friday night that the airline of Billionaire Sir Richard Branson started the discussions to acquire the company after the Exeter-based airline put itself up for sale earlier this month.

The shares later balanced out at five percent increase, even though its current stock value of 9.6p is still far off the 14p that was recorded last October.

Flybe stated: “There can be no certainty that an offer will be made, nor as to the terms on which any offer will be made.”

Virgin Atlantic emphasised the same point. It added that “it is reviewing its options in respect of Flybe which range from enhanced commercial arrangements to a possible offer for Flybe.” It said that it has an existing trading and code-sharing relationship.

Rothschild serves as the adviser of Virgin on the bid.

Sky disclosed that the company of Sir Richard saw the takeover as an opportunity to boost the passengers on its long-haul network and also as an access take-off and landing slots at Heathrow Airport reserved for domestic flights.

Easyjet and Stobart Group, an infrastructure company, are also believed to be vying to acquire Flybe, even though the boss of Easyjet ruled a purchase out during a media conference that was held last week.

Earlier this month, Flybe began looking for a sale after its profits dropped by 54 per =cent in the six months to the end of September.

Weaker sterling, a decline in customer demand, and higher fuel prices affected the airline, while it has committed to leasing Embraer jets between the period of July and December next year, costing it approximately $114 million (£88.5 million).

Last month, the shares in the airline halved when the firm issued a full-year profit warning, before the release of its half-year results last week.