Andrew Tinkler’s offer of a safety net to Flybe has been cast aside after the airline told shareholders it will shut down if it did not vote through the takeover by Connect Airways.

In a strong letter to shareholders, the troubled airline said the deal with the Connect Airways consortium – which includes Stobart Group subsidiary Stobart Aviation – was the only course of action to keep Flybe in the air.

While Flybe’s board has agreed the £2.2 million, one pence per share sale to Connect Airways, which also includes Virgin Atlantic, it needs to be approved by investors when they meet in London on March 4.

“If the scheme (sale) is not approved, the Flybe directors intend to take steps to wind-up the company and shareholders are likely to receive no value for their shares in Flybe,” it warned.

“Accordingly, the Flybe directors believe that the terms of the (Connect Airways) acquisition remain in the best interests of Flybe shareholders as a whole, and unanimously recommend that Flybe shareholders vote in favour.”

The ultimatum comes after Cumbrian tycoon and former Stobart Group chief executive, Mr Tinkler waded in to the Flybe takeover offering a capital injection should a deal fall through.

Advisers for Flybe and Mr Tinkler have met to discuss a “very preliminary, short and highly conditional outline contingency proposal”, but Flybe stressed it did “not contemplate an offer for the whole of Flybe or any other acquisition structure”.

Mr Tinkler said he hoped the Flybe board would “continue engaging positively with regard to our outline proposal, for the benefit of all shareholders”, even though the airline said the Connect Airways takeover was the only “viable option”.

The statement added: “Although the price per share offered by Connect Airways was disappointingly low, its proposal was ultimately the only proposal capable of immediate execution to enable Flybe and the Flybe subsidiaries to continue to trade as going concerns.”

The clear message to shareholders appears to have cast aside the offer from Mr Tinkler, who was not available for comment at the time of writing.

The takeover by Connect Airways is already far down the runway, having committed £15m of a £20m bridge facility to support Flybe's ongoing working capital and operational requirements.
It is also planning to invest up to £80m to support Flybe’s growth, with additional investment from investment firm DLP Holdings Sarl.

Flybe was put up for sale in November in the wake of a profit warning blamed on falling demand, a £29m hit from rising fuel costs and the weak pound.

The takeover would see Virgin Atlantic operate a network of regional flights provided by a combination of Flybe and Stobart Air.

Flybe has 78 planes operating from smaller airports including London City, Southampton and Norwich, carrying around eight million passengers to destinations across the UK and Europe.

Mr Tinkler’s entrance mid-takeover comes just weeks after he bought a 10 per cent stake in Flybe. The tycoon was said he was not seeking to disrupt the takeover by Connect Airways.

Mr Tinkler led Stobart Group as chief executive until 2017 and is widely credited as being the driving force behind its success.

But things turned sour when he was sensationally sacked as an executive board director last summer by the company for an alleged breach of contract, a charge which he denies.