Good morning, it's Paul here.

Before we start on today's news, I'll have a quick look back at some interesting developments yesterday



Debenhams (LON:DEB)

The AGM yesterday resulted in the Chairman, Sir Ian Cheshire, being ousted - his re-election was opposed by 2 major shareholders (Sports Direct, and one other - Brandes maybe?)

The CEO, Sergio Bucher, was also not re-elected as a Director. Very unusually though, he's staying on as CEO, but not as a Director. I can't see that arrangement lasting long.

As mentioned yesterday, I feel that DEB shares are probably worth zero now. The reason being that the company will almost certainly need to do some form of restructuring (probably a pre-pack administration) in order to shed long, and uneconomic property leases.


Halfords (LON:HFD)

Will revisit this later




Flybe (LON:FLYB)

Recommended cash offer

This is a total disaster for Flybe shareholders, unfortunately. A bid has been agreed, but at just 1p per share. The share price was 16.4p last night. What a pity for shareholders, who have woken up to a 94% loss this morning.

Flybe has been in bid talks for a while, and there were several interested parties - e.g. Virgin, and possibly BA. Press reports suggested that competition between them could result in a decent outcome for shareholders, but sadly not.

The 1p/share bid has come from a consortium of Cyrus (40%), Stobart (30%), and Virgin (30%). They will provide a £20m bridging loan, and up to £80m of additional investment.

Clearly, the financial position of Flybe must have been far worse than management had admitted to the market.

I thought the balance sheet at Flybe looked OK, given its considerable fleet of owned aircraft, being far larger than its debt. However, clearly there must be more to it than that. It looks like the working capital position must have engulfed the company.

My commiserations to anyone who has been hit by this disaster.

EDIT: I see the share price has settled (at c.9:30) at about 3.3p, over 3 times the 1p agreed bid. There must be traders betting on a higher bid being forthcoming. Given that the bid is only just over £2m, there's some logic to this.…

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