Leading commercial law firm Hill Dickinson, led by its chairman Jonathan Brown and head of the Manchester corporate team Ian Gillis, advised Stobart Group Limited in connection with the offer made on 11 January 2019 for the entire issued and to be issued share capital of Flybe Group plc by Connect Airways Limited.

Connect Airways Limited is a joint venture company owned 40% by funds managed by Cyrus Capital, 30% by Stobart Aviation Limited (a wholly owned subsidiary of Stobart Group Limited) and 30% Virgin Atlantic.

The Flybe shareholders will be entitled to receive an aggregate amount of £2.2 million with the shareholders of Connect Airways to make available facilities of up to £100 million. As part of the transaction, Stobart will also sell the entire issued share capital of Everdeal Holdings and Propius Holdings to Connect Airways for an aggregate consideration of £40 million.

It is intended that the acquisition will be effected by means of a court-sanctioned scheme of arrangement. The acquisition is subject to a number of conditions that must be satisfied or waived before completion, which is anticipated to occur in the second quarter of 2019.

The transaction will enable Flybe to benefit from committed strategic investment partners in terms of each of Cyrus, Stobart Group and Virgin Atlantic and from an enhanced presence at London Heathrow Airport and Manchester Airport with the potential to grow further in London Southend Airport. The combination of Stobart Air and Propius with Connect Airways is expected to bring benefits to customers, suppliers and employees, providing stability in an extremely tough trading environment.

Commenting on the deal, Stobart’s CEO Warwick Brady said: ‘The Board of Stobart Group believes that bringing Stobart Air together with Flybe and partnering with Virgin Atlantic and Cyrus Capital is the best way for us to play an active role in UK regional flying.

‘The combined entity will be a powerful combination with sufficient scale to compete effectively in the UK and European airline markets.  It will allow us to continue to work with Flybe and provides an excellent opportunity to continue to grow passenger numbers at London Southend Airport.’

Jonathan Brown added: ‘We were very pleased to act for long standing client Stobart Group in this complicated and important transaction utilising lawyers across a wide range of disciplines within the firm’.

Jonathan and Ian were assisted by partner Michael Murphy, legal director Deepak Purushothaman, senior associate Elan Iorwerth  and associate Sean Lightfoot.

Pensions advice was provided by partner Barry Gibb.