Irish airline CityJet has pulled out of its planned acquisition of Stobart Air, the Dublin-based airline formerly known as Aer Arann.
CityJet informed Stobart of its decision in writing this morning, ending months of negotiations.
Talks on a takeover began in earnest at the end of 2015 and it is understood that CityJet signalled to Stobart on Friday that it needed a decision on its bid by today.
Speaking to The Irish Times, CityJet chairman and chief executive Pat Byrne expressed his disappointment that it wasn't possible to conclude a deal. "I'm very disappointed that having put so much time and effort into this and, for no apparent reason, the deal hasn't happened," he said.
Mr Byrne said Stobart Air would have been merged into CityJet in a deal that would have been a “very good fit” for his company.
He said significant corporate transactions had a “certain life and, if completion is not reached within that window, the dynamics shift and people tend to move on”.
Process
“The process became protracted over several months and, in the circumstances, we presented Stobart with a deadline for completion. The deadline lapsed this morning and, consequently, we have withdrawn from the process.”
Mr Byrne said there was “little chance of the deal being revived”.
He said CityJet would move on to completing other initiatives, including the acquisition of another European regional airline and a major wet lease deal. “We’re flat out with a number of things,” he said. “It’s full steam ahead and we’ll just get on with the other things we’re trying to complete.”
It is understood that CityJet had spent more than €500,000 on legal and other fees pursuing the Stobart acquisition.
In a statement, the Stobart Group said its board had discussed a number of options with CityJet, including a change of ownership.
“Following consideration, and informed by our wider [strategic] review, the board has concluded that the agreement with CityJet is not in the commercial interest of the group,” it said.
Negotiations
Stobart Group, which is a publicly-quoted UK company, recently acquired Invesco Asset Management Ltd’s interests in Stobart Air and the aircraft leasing business Propius Holdings.
It said negotiations are progressing to acquire the remaining 33 per cent interest in Propius from Aer Lingus.
Stobart Group said it plans to further develop its services at London Southend Airport, through the addition of 18 new destinations with Flybe under their franchise agreement.
Stobart Air serves 32 regional routes with up to 860 weekly flights between the UK, Ireland and mainland Europe.
It operates the Aer Lingus Regional service, and runs services for Flybe, from London Southend Airport and the Isle of Man. It expects to carry 1.8 million passengers in 2016.
