Flybe shares soar 13% as listing raises £66m

SHARES in Flybe soared by more than 13 per cent yesterday as the budget airline's stock market listing took off.

• Jim French, chief executive of Flybe, whose flotation yesterday values the firm at about 215m. The airline said it would use about half of the 66m raised to expand its fleet Picture: Colin Hattersley

The carrier - led by Scots-born chief executive Jim French - raised about 66 million by floating a 30 per cent stake in the company, valuing it at about 215m.

Flybe had initially offered its shares at between 285p and 385p each, but lowered the top end of price guidance to 295p on Thursday, the final day of bookbuilding, which was led by sole bookrunner Bank of America Merrill Lynch.

The airline said it would use about half of the cash raised from the initial public offering (IPO) to fund the expansion of its fleet and the other half to strengthen its cash position to fund acquisitions.

The carrier's biggest shareholder, which before the offering held a 69 per cent stake in the company, is a trust that looks after the estate of the late Jack Walker, the former steel magnate and owner of Blackburn Rovers football club.

The trust will own about 49 per cent of Flybe after the IPO, while about 7 per cent will be held by the airline's employees.

British Airways, which owned 15 per cent of Flybe before the sale, said it planned to subscribe for enough shares in the offer to maintain the size of its holding.

Exeter-based Flybe claims to be one of only a few European airlines to have reported profits since the financial crisis, posting a 6.8m surplus in the year to 31 March, although this was down from 12.8m the previous year.

It employs more than 2,900 people and operates 215 routes across Europe.