US airline Mesa leads last-minute Flybe rescue offer in blow to Virgin
Arizona-based airline Mesa has tabled a £65m rescue deal for struggling airline Flybe in a dramatic move that could derail a takeover bid led by Virgin Atlantic.
City PM understands Mesa is leading a consortium of investors that offered an injection of new equity at a Flybe board meeting today in a bid to save the ailing airline.
Read more: Flybe's ultimatum over Virgin bid sends shares crashing
The rescue plan, first reported by Sky News, is also said to be supported by fund manager Bateleur Capital and hedge fund Avenue Capital.
The terms of the deal would see the group inject £65m of new equity at roughly 4.5p per share, much higher than the 1p per share offer tabled by the Virgin-led consortium.
Mesa’s offer would also include new debt facilities, taking the total funding up to £120m, and is subject to Flybe rejecting Virgin’s offer.
The move is a dramatic last-minute intervention in the takeover saga that has sparked anger among investors.
The Virgin-led group has already provided the budget airline with the first £10m of a bridging loan worth up to £20m.
But Flybe’s biggest shareholder, Hosking Partners, has slammed the airline’s directors for accepting the deal and threatened to challenge the bid in court.
Read more: Flybe directors give shareholders ultimatum over takeover bid
The last-minute offer means Flybe must now make a decision before Friday, when the Virgin deal is set to complete.
Flybe declined to comment, while Mesa could not be reached for comment.