LHA & Bmi

German flag-carrier Lufthansa has secured European clearance to acquire a controlling share in the UK operator BMI, after regulators concluded that the two airlines already co-operated on routes where their networks overlapped.

Lufthansa is planning to raise its share of BMI to 80%. The European Commission, having analysed the proposal, says that it will "not significantly impede effective competition".

The analysis took into account Lufthansa's intended takeover of Belgium's Brussels Airlines, which is also undergoing Commission scrutiny.
As a result competition regulators identified 31 overlapping routes - mainly to Germany and Belgium - centred on eight UK destinations: London, Birmingham, Manchester, East Midlands, Bristol, Edinburgh, Leeds and Newcastle.
"On many of these routes the parties, which are both members of Star Aliance, already co-operate with each other," says the Commission.
"Lufthansa would be unlikely to start operating flights on those routes on which it currently only markets flights operated by BMI, and vice versa."
It adds that Lufthansa and BMI combined would also have "sufficient competition" on routes where the two carriers do not co-operate.
BMI also has "limited" freight and maintenance operations and the Commission has determined that competition in these sectors would not suffer under the merger.

La compagnie aérienne allemande Lufthansa ne souhaiterait plus acheter la britannique BMI (British Midland), estimant son coût trop élevé, affirme l'édition à paraître samedi du quotidien Süddeutsche Zeitung.

2009 AFP

Cela mérite réflexion !

BERLIN (AFP) – Leading German carrier Lufthansa is no longer interested in acquiring full control of British airline bmi because the price is too high, Saturday's edition of Suddeutsche Zeitung reports.
Lufthansa management felt that bmi's financial position was worse than first thought, says the report.

The British airline lost 112 million euros (151 million dollars) in 2008.

The report, which did not cite any sources, ....

.......follows Thursday's decision by EU antitrust regulators to approve the deal whereby Lufthansa would increase its 30 percent stake in bmi to 80 percent.
"After examining the operation, the (European) Commission concluded that the transaction would not significantly impede effective competition," Europe's top antitrust watchdog said in a statement.

Lufthansa's takeover, announced in October, would make the German carrier the second biggest airline at London's Heathrow airport, Europe's busiest hub.

Lufthansa could walk away from its takeover of bmi British Midland unless bmi's majority investor provides it with more capital, the Financial Times reported, citing Lufthansa finance chief Stephan Gemkow.
The paper quoted Gemkow as saying that bmi's weak finances meant that contractual conditions for the takeover had not been met.
"What we want to have is the company in its contractually agreed state and that means the company has the licenses it needs to operate and the funds it needs to operate," the paper quoted him as saying.
"We have a situation in which, to our understanding, the conditions have not been met... if they are not met, one day we will walk away."

Lufthansa agreed to take control of bmi last October after founder and controlling shareholder Sir Michael Bishop exercised an option to sell it his stake of 50 percent plus one share.
Lufthansa already owns 30 percent minus one share of bmi while Scandinavian airline SAS holds 20 percent.
Last week, a Lufthansa spokeswoman said that the approval of the European Union's anti-trust authority, granted on Thursday, meant that one of the conditions of the deal had been met, "but not all."

(Reuters)

Il n'a que se vérifier avant de parler !

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.

Sir Michael Bishop, chairman and controlling shareholder of BMI British Midland, resorted to legal action on Wednesday in an effort to force Lufthansa to take over his majority stake in the struggling UK airline.
He is seeking to enforce a long-standing contract under which he had an option to require the German aviation group to take over his stake of 50 per cent plus one share in BMI.He exercised the option in October last year to sell the stake for about €400m ($551m). The deal had been expected to be completed by mid-January.

The transaction was delayed, partly by the longer than expected time it took to gain approval from the European competition authorities, but Brussels finally gave the go-ahead last week.

In the meantime, tensions have been growing between the two sides. Lufthansa sought to force Sir Michael to make a capital injection of about £100m into BMI to strengthen the airline’s balance sheet ahead of a transfer of the shares.
Sir Michael believes the demand for extra finance is a device by Lufthansa to try to force down the price, which had already been agreed in the original contract 10 years ago.

His company, BBW Partnership, said Wednesday night it had issued proceedings in the High Court in London to declare that BBW had “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”.

Lufthansa said Wednesday night it had not been informed of the legal action. “We have not received any communication,” it said.

The German group owns a stake of 30 per cent minus one share in BMI, while SAS Scandinavian Airlines holds the remaining 20 per cent.
Sir Michael’s decision to take legal action follows a warning by Stephan Gemkow, Lufthansa chief financial officer in an interview with the FT this week, that the German group could walk away from the planned takeover unless Sir Michael agreed to inject more capital.

Under European law, aviation regulators must be satisfied about an airline’s business plan and its funding in order for it to keep its operating licence.

The UK carrier is the second-largest airline operating at London Heathrow. Its main strategic asset is its control of about 11 per cent of all the take-off and landing slots at the airport.

Sir Michael Bishop, the controlling shareholder in bmi, has issued legal proceedings against Lufthansa to enforce a merger of the airlines.
BBW, the company through which Sir Michael holds 50 per cent of bmi, submitted proceedings to the High Court yesterday demanding that Lufthansa fulfil its contractual agreement.
Sir Michael exercised an option to sell his bmi stake to Lufthansa for about £350 million at the end of last year. The airlines received regulatory approval from the Department for Transport, the Civil Aviation Authority (CAA) and the European Commission last week.
BBW said yesterday that this fulfilled the contractual requirements for the deal to be completed.

Lufthansa, however, disagrees and has raised concerns about whether bmi’s capital adequacy may be in breach of CAA rules. It wants shareholders, including Sir Michael, to put more money into bmi, the former British Midland.

The CAA said yesterday that it was happy with bmi’s financial situation.

Sir Michael rejected the need for a cash injection.
Bmi lost nearly £100 million last year and has said that it will face a difficult 2009 as passenger demand for air travel has plummeted.

The CAA requires airlines to have at least three months of capital available to ensure that there is sufficient money to pay for aircraft maintenance. The capital adequacy rules are also designed to give passengers confidence that tickets bought in advance will be honoured.

A Lufthansa official said that the airline remained committed to buying bmi, but noted that there were issues to settle. If these cannot be resolved, the German carrier could walk away from the deal.

alain57 a écrit:LH installe ses hommes a la tête de BMI....

SAS sells 20% stake in bmi to Lufthansa

SAS has held a 20% stake in the UK based British Midland PLC ("bmi"). According to the Core SAS strategy with focus on the Nordic home market this stake has been set out for divestment. LHBD Holding Ltd. holds 80% of the shares in bmi since July 1 2009. LHBD is a UK-based company, in which Deutsche Lufthansa AG holds a 35% stake. On September 30 the SAS Group has reached an agreement with Lufthansa and LHBD to sell SAS 20% stake in bmi to LHBD. Under the terms of the agreement LHBD will acquire the 20% stake for approximately MGBP 19 million. Furthermore Deutsche Lufthansa AG will pay SAS another MGBP 19 million for the cancellation of its rights resulting from the shareholder agreement dated 1999. In total SAS will receive a cash consideration of MGBP 38 resulting in a capital gain of approx MSEK 420. SAS will receive an additional payment from Lufthansa if further value in bmi can be realized within a period limited to 2 years. Following the transaction, SAS will remain with a maximum exposure of MGBP 19 within a period limited to 2 years, in case of material adverse financial development of bmi and lack of financial support from Lufthansa.