You just have to wonder whether the timing of the FR statement wasn't a little calculated. The EU still say that any final decision has yet to be made. They're effectively issuing warning in public that if it is a no they're going to be angry fight it all the way. Bully boy tactics really.
Regarding the bid itself its hard to disagree with those of the opinion that Flybe would just become a Ryanair pup and once their time is up would be suitably squashed. It seems the EU might see it this way too and the only way to stop FR collecting all the chess pieces in the long-term is by getting someone else to buy EI. Unless of course you believe they'll survive an FR competition onslaught in the wake of the EU saying no again.