Troubled regional airline Flybe has snubbed a rival rescue proposal from investors including US airline Mesa Air Group and backed by former Stobart boss Andrew Tinkler.
Shares in Flybe more than doubled to 2.9p as it confirmed the “highly conditional” approach from a consortium including Mesa Airlines of Arizona and New York-based investment group Bateleur Capital.
But Flybe said it “does not believe that the indicative proposal is executable in the timeframe required to enable Flybe to continue to trade”.
It added it continues to back the existing takeover by the Connect Airways consortium – which consists of Sir Richard Branson’s Virgin Atlantic, Stobart Group and investment firm Cyrus Capital – as the “only viable option available to the company which provides the security that the business needs to continue to trade successfully”.
The Mesa consortium is reportedly proposing to make a capital injection of £65 million at 4.5p a share.
Flybe confirmed that Mr Tinkler – its second largest investor – had given the proposal his indicative support, alongside “other unnamed institutional shareholders”.
But Flybe has already drawn down £15 million in working capital from Connect.
Under the terms of the Connect deal, the buyers will pay £2.8 million to take control of the main trading company Flybe and the online arm Flybe.com.
It will later complete the purchase of the wider holding company for 1p a share.
Connect has also committed to make available a £20 million bridge facility to support Flybe’s working capital and operational requirements.
In addition, following completion, it intends to provide up to £80 million of further funding.
The takeover saga has attracted controversy already, with Hosking – its biggest shareholder – forcing it to convene a general meeting to consider resolutions to oust chairman Simon Laffin and replace him with Eric Kohn.
Hosking wants Mr Kohn to investigate the carrier’s recently agreed takeover by the Connect Airways consortium.