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9W To Bid For BMI?  
User currently offlineLAXDESI From United States of America, joined May 2005, 5086 posts, RR: 47
Posted (6 years 5 days 20 hours ago) and read 3880 times:

I came across this at airliners-India.
http://airlinersindia.s4.bizhat.com/airlinersindia-forum-3.html

The original linked article is as follows:
http://airliners1.wordpress.com/2008/09/17/jet-and-ba-to-bid-for-bmi/

Quotes:
In late breaking news from sources, Jet Airways is believed to be in advanced stages of a agreement to bid for BMI for as much as USD 400 Million. Meanwhile rumors are also floating that Etihad is in talks with BMI for a possible merger.

Like almost all airlines, BMI has seen its profits trimmed this year by the continuing high price of aviation fuel. BMI flew 10.6 million passengers last year, and operated 70 aircraft.

As the owner of 11% of the take-off and landing slots at Heathrow Airport, bmi is seen as a very valuable asset, especially as the value of its 83 slot pairs - the largest portfolio after British Airways - has sky rocketed following last year’s open skies deal between the European Union and the US, which opens up Heathrow to new airlines from April 2008.

For Jet Airways, bmi could prove to be critical as it is finding it difficult to break into the European market from its hub in Brussels as other European airlines are not keen to partner with it. So, with bmi in its pocket, it could piggy back on its formidable presence across Europe and also use Heathrow as a second international hub.

12 replies: All unread, jump to last
 
User currently offlineDavid_itl From United Kingdom, joined Jun 2001, 7379 posts, RR: 13
Reply 1, posted (6 years 5 days 20 hours ago) and read 3840 times:
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Quoting LAXDESI (Thread starter):
Jet Airways is believed to be in advanced stages of a agreement to bid for BMI for as much as USD 400 Million

That's only £220m. Seems to undervalue BD's value with regards to 11% of slots at LHR?!? EY were meant to talkng around £600m if I remember recent speculation, so if 9W wants to buy BD, it will have to seriously raise it's bid and hopes that LH does not make a decision to buy BD.

[Edited 2008-09-17 11:20:34]

User currently offlineLAXDESI From United States of America, joined May 2005, 5086 posts, RR: 47
Reply 2, posted (6 years 5 days 20 hours ago) and read 3822 times:



Quoting David_itl (Reply 1):
That's only £220m. Seems to undervalue BD's value with regards to 11% of slots at LHR?!? EY were meant to talkng around £600m if I remember recent speculation, so if 9W wants to buy BD, it will have to seriously raise it's bid and hopes that LH does not take decide buy BD.

I too thought the bid amount did not make sense unless 9W was looking to take a minority stake. Can a non-Euro carrier buy a majority stake in BMI?


User currently offlineDLPMMM From United States of America, joined Apr 2005, 3592 posts, RR: 10
Reply 3, posted (6 years 5 days 20 hours ago) and read 3792 times:

There is an EU restriction of 49% maximum non-EU ownership to operate an EU based airline. If a non-EU airline bought BD, they could not operate intra-EU flights IINM.

User currently offlineAA1818 From Trinidad and Tobago, joined Feb 2006, 3435 posts, RR: 4
Reply 4, posted (6 years 5 days 20 hours ago) and read 3745 times:

Will that make it less likely that 9W will join One World?

Quoting DLPMMM (Reply 3):
If a non-EU airline bought BD, they could not operate intra-EU flights IINM.

but they could try to operate BD as a feeder and use it run certain routes that it deems vital?!

AA1818

[Edited 2008-09-17 11:52:42]


“The moment you doubt whether you can fly, you cease for ever to be able to do it.” J.M. Barrie (Peter Pan)
User currently offlineLAXDESI From United States of America, joined May 2005, 5086 posts, RR: 47
Reply 5, posted (6 years 5 days 20 hours ago) and read 3674 times:



Quoting David_itl (Reply 1):
That's only £220m. Seems to undervalue BD's value with regards to 11% of slots at LHR?!? EY were meant to talkng around £600m if I remember recent speculation, so if 9W wants to buy BD, it will have to seriously raise it's bid and hopes that LH does not make a decision to buy BD.

At $1 billion(600 million pounds), each of the 83 slot-pairs will be worth about $12 million. Isn't that too low? What do the slot pairs normally sell for?


User currently offlineZWZWUnited From United States of America, joined Jun 2008, 197 posts, RR: 0
Reply 6, posted (6 years 5 days 19 hours ago) and read 3590 times:

OMG, what is this whole race to capture BD?!?!?! Do they poop solid gold or something? Why is it that all these world carriers are out to buy them? Do they really offer something THAT valuable (don't get me wrong, I REALLY like BD, but SRSLY......)???

~Tim  Smile



Drop it like its hott!
User currently offlineSammyk From United States of America, joined Oct 1999, 1690 posts, RR: 0
Reply 7, posted (6 years 5 days 19 hours ago) and read 3563 times:
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Quoting LAXDESI (Reply 5):
At $1 billion(600 million pounds), each of the 83 slot-pairs will be worth about $12 million. Isn't that too low? What do the slot pairs normally sell for?

Wholesale pricing?  Wink

Quoting ZWZWUnited (Reply 6):
OMG, what is this whole race to capture BD?!?!?! Do they poop solid gold or something? Why is it that all these world carriers are out to buy them? Do they really offer something THAT valuable

I guess airlines find those Heathrow slots to be very valuable.


User currently offlineZWZWUnited From United States of America, joined Jun 2008, 197 posts, RR: 0
Reply 8, posted (6 years 5 days 19 hours ago) and read 3537 times:



Quoting Sammyk (Reply 7):
I guess airlines find those Heathrow slots to be very valuable.

Is that all they are after? Would they essentially dissolve the airline and just hold onto their LHR slots?

~Tim  Smile



Drop it like its hott!
User currently offlineBehramjee From Canada, joined Aug 2003, 4785 posts, RR: 43
Reply 9, posted (6 years 5 days 17 hours ago) and read 3309 times:



Quoting LAXDESI (Reply 5):
At $1 billion(600 million pounds), each of the 83 slot-pairs will be worth about $12 million. Isn't that too low? What do the slot pairs normally sell for?

slot prices at Heathrow vary as per their timings i.e. peak time slots command premium pricing where as non-peak time slots can be sold/leased at a lower cost.

but I dont seem to understand why 9W thinks it even has a chance with this deal if Etihad is prepared to offer 2.5 times the amount i.e. $ 1 billion compared to $ 400 million to purchase BMI.

Virgin and Branson need to focus and make sure that this deal is theirs for the taking.


User currently offlineHAWK21M From India, joined Jan 2001, 31684 posts, RR: 56
Reply 10, posted (6 years 5 days 14 hours ago) and read 3171 times:

I still can't believe that 9W would want to bid for BMI when they are currently trying to reduce their losses with Jet lite.

regds
MEL



Think of the brighter side!
User currently offlineAtmx2000 From United States of America, joined Oct 2004, 4576 posts, RR: 37
Reply 11, posted (6 years 5 days 13 hours ago) and read 3145 times:



Quoting LAXDESI (Thread starter):
For Jet Airways, bmi could prove to be critical as it is finding it difficult to break into the European market from its hub in Brussels as other European airlines are not keen to partner with it. So, with bmi in its pocket, it could piggy back on its formidable presence across Europe and also use Heathrow as a second international hub.

Why do European airlines not want to partner with it?



ConcordeBoy is a twin supremacist!! He supports quadicide!!
User currently offlineCricket From India, joined Aug 2005, 2968 posts, RR: 7
Reply 12, posted (6 years 5 days 6 hours ago) and read 2979 times:

I'm not sure 9W has the liquidity to go in for a deal like this, 9W's stock has a 'Sell' rating by all major institutions that cover it, teh company has been trying to raise funds for a while to purchase additional 77W's (exercise their 7 options) and is not getting the valuation they want. Don't get me wrong 9W has enough cash to maintain their operations, but expansion funds are just not there and given the current banking climate I'm pretty sure that 9W just can't land up at a bank and ask them to lend them some money to buy an airline that is not in the best of health.


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