Tinkler stokes Stobart war with raid on Flybe shares

Monday 14th January 2019 08:30 GMT

Sky News has learnt that Andrew Tinkler, who is embroiled in a protracted legal row with his former employer, snapped up a stake of approximately 10% in Flybe Group during Friday's trading session.

Mr Tinkler's move came within hours of Stobart's confirmation that it was part of a consortium which had agreed to acquire Flybe in a cut-price £2.2m deal.

The stake purchase by Stobart's former boss, which is likely to have cost him several hundred thousand pounds, is expected to be disclosed to the London Stock Exchange on Monday.

It represents another surprising development in one of the bitterest rows to flare up between a London-listed company and an erstwhile chief executive for years.

Mr Tinkler was removed from Stobart, which owns Southend Airport, last year for an alleged breach of contract, which he denied.

The boardroom conflict quickly moved into the courtroom, with both Mr Tinkler and Stobart suing each other amid allegations relating to millions of pounds of expenses claims and vote-rigging at a company shareholder meeting.

The two parties are awaiting judgments in the dispute.

A source close to Mr Tinkler said on Friday evening that he was not seeking to disrupt the proposed 1p-a-share takeover of Flybe, which is being led by Virgin Atlantic Airways and also includes Cyrus Capital Partners, an investment fund.

Under Mr Tinkler's leadership, Stobart Group explored a bid for Flybe, but it was abandoned early last year.

The airline's shares closed down more than 77% on Friday as investors digested the news that the consortium's takeover bid would ascribe little value to the company.

It was unclear what price Mr Tinkler had paid for the stake, who he had acquired it from and whether he planned to make any further purchases.

Analysts believe the appearance of a rival bidder is possible but far from inevitable.

The proposed sale of Flybe at such a knockdown price underscores the aviation sector's huge financial challenges.

It comes less than two months after Flybe put itself up for sale, blaming a toxic cocktail of currency volatility, rising fuel costs and Brexit-related uncertainty.

Although it is small in financial terms, Flybe remains one of the UK's best-known airline brands, carrying thousands of passengers between largely second-tier British airports as well as European destinations.

Under the terms of the deal, Virgin Atlantic will operate the network of regional flights provided by a combination of Flybe and Stobart Air, Stobart's franchise airline.

The carrier part-owned by Sir Richard Branson will be the largest shareholder in the newly formed company, Connect Airways, with Stobart Group and Cyrus Capital Partners owning substantial stakes.

Stobart will contribute the assets of Stobart Air rather than any cash in exchange for its stake in Connect, which will inherit Flybe's £100m of debt.

For Virgin Atlantic, control of Flybe's regional network will provide a valuable feed into its long-haul flights to international destinations.

Its return to the domestic UK aviation market will come four years after announcing the closure of Little Red, its previous attempt to make money from a notoriously difficult sector.

Rising oil prices and the weakening of sterling have put airlines under intense pressure, with a deepening industry price war accentuating the financial squeeze.

At the end of September, Flybe retained a fleet numbering 78 aircraft, and has promised investors that it would continue to reduce capacity to focus on its most popular routes.?

A spokesman for Mr Tinkler declined to comment.

Now On Air
Coast Overnight
Back-to-back music and information right through the night.