Flybe will ask shareholders to vote on whether or not to remove its chairman as the struggling airline tries to keep a cut-price takeover on course in the face of investor pressure.
The budget flyer, which is set to be taken over by a group led by Virgin Atlantic, has agreed to set a date for a general meeting at which Simon Laffin’s future will be up for debate.
The airline's shares surged 9.4 per cent to 3.5p in early morning trading following the news.
Major shareholder Hosking Partners urged Flybe to call the meeting as it considers legal action over the low-ball £2.2m takeover of the airline, which will see the Virgin-led consortium pay investors a penny per share.
Hosking wants to replace Laffin, who has served on the board for five years, with aviation industry veteran Eric Kohn.
“The company will within 21 days from 1 February 2019 call a general meeting of shareholders to consider the resolutions to appoint Mr Eric Kohn and remove Mr Simon Laffin as directors of the company and such general meeting will be held on a date not more than 28 days after the date of the notice convening the meeting,” Flybe said this morning.
“The board is writing today to Mr Kohn to invite him to meet with the nomination committee of the board in accordance with its procedures applicable to the assessment of board candidates. Following this meeting, in the circular to shareholders accompanying the notice of general meeting, the board will make recommendations to shareholders in relation to the resolutions.”
Hosking has also urged Flybe to charge Kohn with leading an investigation, though it did not say would Kohn would investigate.
“Flybe has again informed Hosking that this resolution would, if proposed, be ineffective as the company's articles of association do not confer on members the necessary powers,” the airline said.
The news comes as former Stobart boss Andrew Tinkler made a capital injection offer for Flybe, after buying a 10 per cent stake in the airline just as the consortium announced its offer.
Flybe said it had received a “very preliminary, short and highly conditional outline contingency proposal” from Tinkler. The money would only be provided if the Virgin-led takeover falls through.
“The board does not consider that the preliminary proposal offers the certainty required to secure the future of Flybe,” the airline added.
Flybe has received £10m of a bridging loan worth up to £20m from Virgin’s consortium, which includes Stobart Group and US private equity giant Cyrus Capital.
Hosking has threatened legal action over the cut-price takeover.