Guernsey-headquartered infrastructure and support service company, Stobart Group, has withdrawn its interest in purchasing Flybe, the UK-based regional air carrier.
Stobart, which owns UK airports London Southend and Carlisle Lake District, reportedly made the decision to withdraw its interest after its bid was rejected. It stated on Thursday that it was, ‘unable to reach an agreement on satisfactory terms’ with the airline’s owners.
The news caused an initial fall of 24.8 percent in Flybe’s share value, but it recovered slightly later in the day. News of Stobart Group’s interest a month ago had sent the airline’s share price up by around 30 percent.
The purchase was seen by industry experts and Flybe’s investors alike as a lifeline for a business that has cut more than a thousand jobs in recent years and closed sites that it considered to be unprofitable.
During difficult financial times for the airline last year, it blamed the problems on an overcrowded European market and maintenance costs that were higher than expected.
In its Thursday announcement, Stobart added that, ‘it is not in its shareholders’ best interests to increase its latest proposal for Flybe above the level which was rejected by the board of Flybe.’ It confirmed however that it intends to keep working with the Airline with regards to its ‘shared interests’ and growing franchise agreements.
In response to Stobart’s withdrawal, Flybe announced that its board ‘remains highly confident in the prospects of Flybe and believes that the group continues to have an exciting future as an independent company.’