Carlisle-based aviation, energy and transport firm Stobart Group has teamed up with Virgin Atlantic and Cyrus Capital to buy Flybe for a cut-price £2.2 million.

A joint venture company called Connect Airways — 40% owned by Cyrus’ unit DLP Holdings and 30% each owned by Stobart Group’s aviation unit and Virgin Atlantic — won the support of Flybe’s board to buy the airline. 

Flybe’s shareholders will receive just 1p in cash for each Flybe share under the terms of the recommended offer, a 94% discount to Thursday’s close of 16.38p.

Flybe was valued at £215 million when it joined the London Stock Exchange in 2010.

Connect Airways will also buy Stobart Group’s regional airline and aircraft leasing business.

Stobart Group CEO Warwick Brady said: “The board of Stobart Group believes that bringing Stobart Air together with Flybe and partnering with Virgin Atlantic and Cyrus Capital is the best way for us to play an active role in UK regional flying. 

“The combined entity will be a powerful combination with sufficient scale to compete effectively in the UK and European airline markets. 

“It will allow us to continue to work with Flybe and provides an excellent opportunity to continue to grow passenger numbers at London Southend Airport.”

Barclays was financial adviser to Stobart Group and Connect Airways, while Rothschild & Co advised Virgin Atlantic. Evercore advised Flybe on the deal.