Potential Buyers Alerted to BMI Sale

The future ownership of BMI was again in doubt yesterday as a 20% stake was put up for sale. SAS, the Scandinavian travel group, announced its intention to sell its holdings in three airlines including the 20% stake in bmi, the UK’s second largest airline. The move is part of a continuing drive to save aproximately £200 million.

Analysts suggest the sale of the bmi stake is likely to raise as much as £250 million, with potential buyers interested in the highly sought after 12% share of take off and landing slots at Heathrow,  which would be an ideal opening to the ‘free skies’ deal for the transatlantic market when Europe-to-US air travel laws are relaxed next year.

Michael Bishop, the BMI chairman, who owns 50 per cent plus one share of the group has first refusal on SAS' stake. The BMI chairman has until June 2009 to exercise an option to sell his stake which was initially valued at £229m eight years ago when the deal was finalised.
Lufthansa, the German airline is another potential buyer, already owning 30% minus one share of BMI. Other potential buyers include British Airways and Virgin Atlantic. Virgin has previously attempted to merge with BMI, whilst British Airways is seen as a potential buyer as it would make sense to protect its position at Heathrow, where it is currently the largest carrier.

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