adicool
Posts: 169
Joined: Tue Apr 10, 2007 8:38 am

LH To Acquire Majority Share In BD?

Fri Jul 20, 2007 12:55 am

I just found out about this on another German aviation board.
Apparently LH are already in negotiations with SK over their 20% share in BD.
But what's really news to me is that according to this article from BBC (http://news.bbc.co.uk/1/hi/business/6751829.stm) LH also have an option to buy shares from Sir Michael Bishop in order to gain full control over BD.
The thing is, I really don't know where LH/LX/BD would go? I know, BD are mostly interesting for their slots at LHR and with the upcoming Open Skies-Agreement one could turn BD into a gold mine, but does BD< really fit with LH/LX? How is BDs long-haul producat, I only flew them once from LHR - AMS (it was a rather pleasant flight, but then again, only one houre). Are the yields good to destinations such as LAS or ORD?
Also there are rumors on the German website that both, LH and TP are interested in JK.
Anyone can confirm those information or give further details?

[Edited 2007-07-19 18:05:47]
 
LHRBlueSkies
Posts: 321
Joined: Tue Jan 16, 2007 4:23 am

RE: LH To Acquire Majority Share In BM?

Fri Jul 20, 2007 1:04 am

It is certainly interesting times!

I'm not quite sure how much consolidation the EU will allow, looking at the BA/IB, AF/KL/IB, LH/TP/JK possible links.

And I'm sure that Sir Bish would fight the selling of his baby to LH!
flying is the safest form of transport - until humans get involved!
 
BCALBOY
Posts: 102
Joined: Mon Mar 19, 2007 9:25 am

RE: LH To Acquire Majority Share In BD?

Fri Jul 20, 2007 7:23 am

Quoting Adicool (Thread starter):
But what's really news to me is that according to this article from BBC (http://news.bbc.co.uk/1/hi/business/6751829.stm) LH also have an option to buy shares from Sir Michael Bishop in order to gain full control over BD.

Bit more clever than that especially from Sir Michael's point of view.

On LH side they have the right to first refusal if He decides to sell , but they have to wait until he wants to sell : they
can-t force him by any particualr time scale.

On Sir Michael's side , he has an option to require LH to purchase his shares at a guaranteed price - I think its
in the time frame up to end 2008 . A couple of years ago it looked like he would exercise this option and
LH would have to pay a price way above the current Mkt value. However with Open Skies , the value of BMI
because of its slot holding at LHR has increased greatly . As result the balance has probably swung and the
price LH has an option to purchase at probably undervalues the company significantly.

Consequently , Sir Michael probably wouldn-t sell altho I suppose LH could renegotiate at a more realistic price.

Also I understand the agreement is with BMI mainline operation i.e basically the LHR part of the airline ,
while BMI Regional and BMI Baby are separate and could still be retained by Sir Michael.


I-m not sure where the B.Med addition fits in any deal ...maybe some BMI insider knows and no doubt they will
correct me ,if any of the above details are incorrect.

Quoting Adicool (Thread starter):
but does BD< really fit with LH/LX?

1.BMI offer feed into LHR for LX/LH on their UK Domestic trunk routes.

2.Acquisition of BMI slots at LHR could allow LX re-instate service to GVA nad BSL to LHR.

3.BMI slots would allow LH to assist other members of Star Alliance with LHR slots.

4.Intro of LHL BMI services at LHR ,particularly to U.S.A would allow LH to codeshare on these services and
allow LH to cause hurt to BA and at a much lower cost than if they operated services themselves.
I suspect BD costs are much lower than LH's.

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