Lufthansa & bmi

Look, there’s no way Virgin are going to buy bmi – they can’t afford it (not at a price that’s seen as sensible by BBW/Bishop anyway), and in any case Lufthansa still want bmi.

What is at issue here is not whether Lufthansa want bmi anymore, but rather how much they pay for it – not only in terms of the shares they end up buying, but also the further finance they may have to inject into the airline once they’ve got it. A deal was agreed a long time ago, but Lufthansa now have one view about whether they’re getting what they agreed to buy, Bish has another. It may well be settled in court, but whether Bish wins or Lufthansa wins, I don’t see Lufthansa walking away – all that will happen if Lufthansa wins is that they will end up having to spend less money overall (because Bish has no other realistic options right now – he’ll have to settle for a lower price) than they would if Bish wins.

Andy

Looks like it’s getting rocky…

BMI majority owner launches legal action against Lufthansa
Victoria Moores, London (20May09, 21:42 GMT, 221 words)

German Star Alliance member Lufthansa’s takeover of BMI seems to be turning sour, after a company owned by BMI’s major shareholder Sir Michael Bishop launched High Court action against the German Star Alliance carrier.

In October last year BMI chairman Bishop exercised a put option, forcing Lufthansa to acquire his full shareholding of 50% plus one share in BMI, under a deal which was agreed in 1999. Bishop holds his stake through an investment vehicle called the BBW partnership. The acquisition will give existing shareholder Lufthansa 80% control of the UK carrier. SAS owns the remaining 20%.

But the pace of the takeover has been slow and, over recent days, UK business daily The Times has reported an emerging a tussle between the two sides. It claims the dispute centres on whether Bishop should be required to recapitalise BMI.

In a brief statement, Bishop’s company says: “The BBW Partnership, controlling shareholder of BMI, has today issued proceedings in the High Court to declare that BBW has fulfilled all the necessary regulatory requirements to complete the sale of BMI to Lufthansa, and seek that Lufthansa be required to complete the acquisition of the shares.”

BMI posted a huge preliminary post-tax loss of almost £100 million ($138 million) for the year ended 31 December 2008, on a slight rise in revenue to £1.04 billion.

Source: Air Transport Intelligence news

Do you think the EU would allow LH to buy BMI in the firstplace, they are gaining a slow monopoly in the EU market.

They received clearance for the purchase last week, so yes is the answer.

Do you think the EU would allow LH to buy BMI in the firstplace, they are gaining a slow monopoly in the EU market.

There’s no way currently that Virgin would even think twice about buying bmi… A source of mine has said they’re not doing too well (to put it politely). 🙁

Jet2 are buying them?! :diablo:

Many a true word said in jest!

The often talked about Virgin/bmi combination makes sense, but SMB is looking to sell, not merge and in this climate can Virgin (or indeed anyone else) afford to buy?

1L.

I think I would prefer for VS to takeover BD, just a personal feeling and no specific reason to why. 🙂

To create London Airways II?

Also if BD and VS did tie up where would this leave BD and the *A?

To be honest I think VS is at some point going to need to align themselves somewhere anyway, and in some respects, given the part ownership of the Airline by Singapore Airlines, then the Star Alliance may be a natural fit.

I always thought VS and BD would go very well together.

Can BD get the TXL and MXP slots back? if so I think a mixture of restarting LBA/MME/JER-LHR and having VS long haul feed would make the combination a great success!

Also if BD and VS did tie up where would this leave BD and the *A?

With a red tail and silver body

Jet2 are buying them?! :diablo:

Paul

If true, where would that leave bmi I wonder?

1L.

With a red tail and silver body. The asset is probably worth more to VS in that it would develop a hub for them in an integrated way, although there would probably need to be recognition that a standalone network carrier of that nature would still need to get into bed with one of the ownership groupings over time.