UPDATE 11am: Virgin Australia’s administrator has officially confirmed Bain Capital has won the bidding war to acquire the airline, after a dramatic morning of announcements.
The successful US investor later said it would set up an employee ownership and profit-sharing scheme and was “committed to protecting as many Virgin Australia jobs as possible”.
The formal announcement came at 11am after its only approved rival, Cyrus Capital Partners, withdrew its proposal early on Friday morning and fired a broadside at administrator Deloitte.
Bain’s winning bid will now be put to creditors in August, who will vote to confirm the deal. It’s still unknown what role the state of Queensland will play, or whether the bondholders will attempt to wrestle back control after launching a coup earlier this week.
Bain also appeared to hint it would retain the Virgin branding, by repeatedly referring to “Virgin Australia” in its correspondence to Australian Aviation.
Administrator Vaughan Strawbridge said the deal “supports the current management team led by [chief executive Paul] Scurrah and their improvement plan for the airline”, suggesting the current top team may remain in place.
Scurrah is also known to be close to Virgin Australia grandee Sir Richard Branson.
Strawbridge said, “Bain Capital has presented a strong and compelling bid for the business that will secure the future of Australia’s second airline, thousands of employees and their families and ensure Australia continues to enjoy the benefits of a competitive aviation sector.”
And in a separate statement to the ASX, Virgin Australia said, “No return to shareholders is anticipated. At this stage, it is not possible to determine the estimated return to creditors however an update will be provided ahead of the second meeting of creditors.”
The announcement came after a morning of high drama that saw rivals Cyrus make a dramatic attempt to seize back control by withdrawing and slamming Deloitte.
In a strongly-worded statement, the US investor said it was pulling out due to a “lack of engagement” with administrator Deloitte, which had “not returned calls, emails or meaningfully engaged”.
Cyrus founder Stephen Freidheim said, “I am disappointed that it has become necessary to withdraw our offer.
“Despite the material improvements put forward, the administrators have still not engaged with Cyrus on its offer.” It later offered to re-enter talks if conditions were to improve.
It is unknown how this development will affect the group of bondholders, who dramatically broke cover earlier this week to announce they were submitting a proposal. The conglomerate has been linked to Virgin Blue founder Rob Sherrard.