January 10, 2019 / 9:44 PM / 5 months ago

UPDATE 1-Virgin Atlantic nears takeover of Flybe - Sky News

(Adds details of the deal from the report, background)

Jan 10 (Reuters) - British regional airline Flybe Group Plc is close to being taken over by a consortium led by Richard Branson’s Virgin Atlantic, Sky News reported on Thursday.

An offer for Flybe worth significantly less than the company’s closing share price on Thursday of 16.38 pence will be announced to the London Stock Exchange on Friday, Sky said, citing sources close to the deal.

The consortium’s offer for Flybe is likely to value its shares at around 20 million pounds ($25.49 million), the report said.

Virgin Atlantic has agreed to team up with Stobart Group Ltd , Flybe's other suitor, and Cyrus Capital Partners to form a new company that will also include the Stobart Air franchise operation, the report bit.ly/2H8t3jM said.

Virgin Atlantic and Flybe were not immediately available for comment on the report outside regular business hours. Stobart Air had no comment.

Under the proposed takeover terms, Virgin Atlantic is expected to be the largest shareholder in the new company, Sky said, while Stobart is contributing the assets of Stobart Air rather than any cash in exchange for its stake.

Virgin Atlantic will operate the network of regional flights provided by a combination of Flybe and Stobart Air, the report added.

The takeover comes less than two months after the regional airline put itself up for sale due to Brexit-related uncertainty, a weaker British pound and rising fuel costs.

Flybe said last year it was in talks with potential buyers, and that Virgin Atlantic was one of the interested parties. The company said it was also looking at other options, such as further capacity and cost reductions. ($1 = 0.7846 pounds) (Reporting by Rama Venkat in Bengaluru; Editing by Jan Harvey)

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