A local bid for Red Funnel by Vectis Ferries has been rejected by the owners of the company after 10 weeks of behind the scenes negotiations. They think their bid was used to drive up an offer from a rival buyer. Read their full statement below.

“From the Island, For the Island”

Vectis Ferries Limited (Vectis) regrets to announce that its offer to acquire Red Funnel has effectively been used to justify taking a higher price from an alternative bidder.

The locally led team has been in private discussion with Red Funnel’s advisors and funders for the last 10 weeks. Vectis has just been advised that short term incremental value is the most important consideration and we understand Red Funnel is well advanced with an alternative offer, believed to be a private equity company. For 25 years, Islanders have suffered from ferry services owned by short term investors who repeatedly sell the business on at inflated prices. Red Funnel has changed hands three times in that period – and is now set for a fourth. Successive sales have extracted money from the Island economy and transferred it to financial, often global, investors with no responsibility or care for the wellbeing of Islanders or the local economy. Despite making substantial profits in the past, Red Funnel has made no provision for the purchase of new vehicle ferries, which are desperately needed.

Vectis offers a credible, longterm alternative. Backed by a private shipping company, a respected Island family with deep maritime roots, and private investors Vectis is ready to commit to invest more than £100 million in nextgeneration ferries and new shoreside facilities. This longterm capital can provide the stability needed to deliver a modern, reliable service for decades to come.

The proposals from Vectis are based on unrivalled expertise: The team is led by Patrick Seely (former Red Funnel NonExecutive Director) and Peter Morton (Founder and Non-Executive Director of Wight Shipyard), supported by Kevin George (former CEO and Chairman of Red Funnel), Graham Barnetson (former Financial Director of Red Funnel), and shipping industry consultant and turn-around specialist James Walton. Their plans set out a radical transformation of crossSolent travel, with new aluminium vehicle ferries cutting ferry times substantially with vastly improved frequency. This vision can create skilled jobs at Wight Shipyard while delivering faster, more reliable crossings for Islanders, businesses, and visitors alike.

Red Funnel selling out for a marginally higher price may add a few million to international balance sheets – little more than a rounding error for global banks responsible for billions – but it risks losing substantial growth opportunities for the Island: new employment, improved connectivity, and an Islandled solution.

Vectis is fully supportive of the Islanders’ Charter, particularly the need to reform the broken dynamic pricing model – which sees prices rise at the times of greatest demand to the detriment of all users. The company is now calling for maximum public support to ensure the Island’s voice is heard, and urging the private equity group currently in talks with Red Funnel, to step aside in favour of an Islandbased approach built on longterm capital investment and the needs of the local economy. The company is grateful for the support it has already received from the Island’s two MPs Richard Quigley and Joe Robertson, IW Council Leader Phil Jordan, and Sir Paul Kenny.

A spokesperson said: “Vectis remains ready to reengage at the earliest opportunity. Until then, the chance to secure faster ferries, more frequent services, and new Island jobs is on hold – a reminder of what could be lost if decisions about the Island’s lifeline transport services continue to be left with those with no real ties to the community. It is time for Islanders to have a say in their future.”

Vectis is also calling on the Government to remind Red Funnel’s lenders and advisers that they have obligations to the community, given the lifeline nature of the service which was recognised by the public funding received during Covid, and to reconsider the Vectis solution rather than chase short-term, relatively small gains from an alternative offer.

If reengagement proves impossible, Vectis wishes to make clear to any new owner that, with its local knowledge and support, it has credible options to launch a competing ferry service.

Red Funnel turns down bid -“From the Island, For the Island”