Flybe shares up 71pc as Virgin talks could herald bid battle
SHARES in embattled regional airline Flybe were flying high after confirming that it is holding takeover talks with long-haul giant Virgin Atlantic.
Flybe skyrocketed after revealing that Sir Richard Branson’s airline was just “one of the parties” interested in a potential bid battle for the company.
Virgin Atlantic said it was reviewing a range of options regarding Flybe from “enhanced commercial arrangements to a possible offer for Flybe”.
Flybe has courted interest from airline giants as the struggling company could bring passengers from regional airports to the UK’S travelling hubs, such as Heathrow and Gatwick.
The company has been left vulnerable to a bid by a 79pc share price plunge in the last eight months but low-cost carrier easyjet has ruled itself out of a bid.
Flybe was forced to appoint bankers from Evercore to explore its “strategic options”, including a sale, last week and has brought in accountants from KPMG to stave off collapse.
The budget airline’s shares hit record lows after projecting larger than expected losses last month. It warned that pre-tax losses will be £22m amid currency headwinds and higher fuel cost.
Takeover interest in Flybe sent shares surging 6.9p, or 71pc, to 16.6p, amid hopes that Virgin has fired the starting pistol on bid battle. Elsewhere, oil giant
slumped to its lowest level since April as crude prices spiralled lower amid fears of a global supply glut.
Record production in top producer Saudi Arabia compounded on fears of the fragile balance of the oil market being disrupted by surging supply. Brent crude has now suffered seven straight weeks of decline as US shale production booms.
The freefall in Brent accelerated yesterday amid worries that slowing global growth will also put downward pressure on demand and prices. Brent crude slid as much as 6.7pc to $58.51 per barrel, its lowest level in a year. The price plunge knocked Shell 93p to £23.33, while peer BP tumbled 12.6p to 512.6p.
The two oil giants dragged the FTSE 100 to a 7.46-point loss at 6,952.86, while the S&P 500 slipped into correction territory following the slump in commodities in holiday-hit trading across the Atlantic. Smaller peers Premier Oil and Cairn Energy suffered sharper drops, sinking 8p to 64.9p and 12.5p to 165.5p respectively.
Brick maker Ibstock rallied 18p to 236.8p after announcing the sale of its US business Glen-gery for $110m (£86m).
Ibstock was also boosted by Peel Hunt upgrading the company to “buy”, arguing that the deal would help the company “refocus on its core markets in the UK”. It added that the company is “now even better placed to invest in UK growth initiatives”.
Silver miner Fresnillo plunged a further 56p to 746.4p after sliding on Thursday amid worries of Mexico’s new Leftist president clamping down on the country’s mining sector.