Thread Lufthansa - BMI

[uncomfortable]

Thread BMI - LH

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

 

[Cesare.Caldi]

Secondo voi sono solo schermaglie legali o davvero LH non è piu' interessata a BMI e perche?

 

[uncomfortable]

Secondo voi sono solo schermaglie legali o davvero LH non è piu' interessata a BMI e perche?

Perché il prezzo é troppo alto. Peró se concedi una put, non hai molta scelta, ti tocca di comprare. Hanno cercato di aspettare piú tempo possibile, ma ora i nodi stanno arrivando al pettine, e Sir Michael ha perso la pazienza.

 

[Cesare.Caldi]

Perché il prezzo é troppo alto. Peró se concedi una put, non hai molta scelta, ti tocca di comprare.

Anche il prezzo di vendita è già stabilito in anticipo? O si può variare in seguito?

 

[uncomfortable]

Anche il prezzo di vendita è già stabilito in anticipo? O si può variare in seguito?

Quando hai un'opzione (put o call) come in questo caso, il prezzo é stabilito in anticipo.
Se non ricordo male, in questo caso Sir Michael aveva un'opzione put e LH aveva un'opzione call, quindi entrambe le parti avevano la possibilitá di "forzare" la transazione ad un prezzo prestabilito.
I dettagli non sono noti, e se non ricordo male c'erano strings attached alla opzione di LH, ma non ricordo bene ció che fu pubblicato l'anno scorso a riguardo.

 

[malpensante]

Strings attached ancora riservate.
BMI dev' essere, nel contratto put/call, perfettamente a posto, ma secondo LH la situazione finanziaria non è tale da essere conforme a quanto prescritto dalle Autorità, quindi va ricapitalizzata.

 

[sevs17]

LH si ritira e BMI viene venduta ad AF-KLM.

Fanta-aviazione?

"Never say never..."

 

[malpensante]

Thursday May 21, 2009

Lufthansa may "walk away" from its acquisition of bmi unless current shareholders inject more capital, CFO Stephan Gemkow told the Financial Times. "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," he told the paper. "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." LH received European Commission approval for the takeover last week.

It is dealing with a similar situation regarding its pending acquisition of Austrian Airlines Group. An AAG spokesperson told ATWOnline that the deal is expected to close in July or August, although LH Chairman and CEO Wolfgang Mayrhuber has said several times that AAG must meet similar financial standards for the deal to make economic sense.

ATWOnline

 

[uncomfortable]

LH non soddisfatta dalla due diligence

Lufthansa demands proof of BMI's long-term liquidity
David Kaminski-Morrow, London (21May09, 14:33 GMT, 502 words)

Lufthansa is unsurprised by UK carrier BMI's resorting to court action to enforce a takeover by the German airline, but insists it will not proceed with the acquisition while there are unanswered questions over the state of BMI's finances.

While Lufthansa is still interested in the UK operator, chief financial officer Stephan Gemkow tells ATI that BMI has become a "less attractive" option as details of its financial position emerge.

Lufthansa confirms it has received the notification of legal action undertaken by BMI's majority shareholder, chairman Sir Michael Bishop's partnership BBW, and its legal team is reviewing the documentation.

But a senior source familiar with the acquisition process claims the development is "not a surprise" and that Lufthansa has been anticipating Bishop's court action, following the impasse over whether or not BMI meets contractual takeover terms.

Lufthansa is insisting that BMI must be able to demonstrate sufficient liquidity to operate for 12 months, says the source, while the UK Civil Aviation Authority's assessments only cover a three-month period.

"We don't have any proof that the 12-month liquidity parameters are met," says the source. BBW maintains that the conditions of its original contract with Lufthansa, on which the takeover is being founded, have been met.

While Lufthansa is pressing BBW to contribute to a hefty capital injection, the source indicates that there are other, still undisclosed, issues which have yet to be resolved before the acquisition proceeds.

The German airline wants the matter cleared up "as soon as possible", the source adds, pointing out that "time is also running" for BMI. He says that, as a 30% shareholder of the UK carrier, which would rise to 80% through the takeover, Lufthansa has an interest in protecting its investment and is not trying to weaken BMI by "playing" with delays.

The Civil Aviation Authority's three-month liquidity requirement is part of European Union operating licence regulations and applies to start-up airlines, a measure designed to avoid the immediate collapse of new carriers.

Although declining to comment on BMI's status, a spokesman for the CAA points out that the authority is obliged to maintain financial oversight of licensed airlines. This is a "flexible" procedure, he says, which takes into account the broad financial state of a carrier - examining long-term business plans and projections in cases of a merger - but which is not based on enforcing a fixed period of liquidity.

BMI's poor financial performance became evident after it revealed a £100 million loss for the full year 2008, following the expiry of a long-term co-operation agreement with Lufthansa and SAS Group of which BMI had been a beneficiary.

SAS Group still holds 20% of BMI but the company has already declared that it will divest the shareholding and is unlikely to contribute capital to the carrier.

Lufthansa insists it still wants BMI as a carrier - rather than just for its valuable London Heathrow slots - but believes its network strategy, as well as its regional and budget operations, will have to undergo a rigorous review.

Source: Air Transport Intelligence news

 

[uncomfortable]

Bishop e LH trovano l'accordo su BD

Lufthansa to take over BMI on 1 July after settling with Bishop
David Kaminski-Morrow, London (22Jun09, 13:33 GMT, 254 words)

German flag-carrier Lufthansa is finally to acquire a 50%, plus one share, stake in BMI on 1 July after reaching an out-of-court settlement with BMI chairman Sir Michael Bishop regarding the takeover agreement.

Lufthansa will pay £48 million ($79 million) for the shareholding, through a UK-based company, LHBD, in which the German airline will initially hold a 35% stake.

But it will also pay £175 million to cancel the controversial put option for the 50%, plus one share, stake in BMI which lay at the centre of the dispute.

Bishop's BBW Partnership currently holds the stake. While Lufthansa had been due to acquire this shareholding, it had argued that certain conditions in the original takeover deal had not been fulfilled.

BBW had claimed otherwise and subsequently aimed to force Lufthansa to proceed with the acquisition by starting legal proceedings at London's High Court.

Under the terms of the out-of-court settlement, Bishop has agreed that "specific performance of the put option will not be available", says Lufthansa, and that the German airline will technically "not be required" to take the shares.

But, in turn, Lufthansa will pay consideration of £175 million for the cancellation of the put option.

Lufthansa's takeover of BMI will be structured in a similar fashion to that of other airline acquisitions by the German carrier.

Once Lufthansa obtains necessary traffic rights it expects to raise its share of LHBD from 35% to 100%. This will give Lufthansa an 80% stake in BMI. The remaining 20% is still held by SAS Group.
Source: Air Transport Intelligence news

 

[AlicorporateUK]

Bel colpo, soprattutto in ottica della busy route MAN-LHR.

 

[Cesare.Caldi]

Cosa farà LH degli slot BMI a LHR? Metterà dei voli LR con aerei LH?

 

[dilan90210]

Metterà dei voli LR con aerei LH?

sarebbe allucinante XD...questa sta sclerando prima o poi la bolla scoppia!

 

[kenadams]

Cosa farà LH degli slot BMI a LHR? Metterà dei voli LR con aerei LH?

Io credo che puntino a una qualche fusione/collaborazione con Virgin. Associare l'attività sul corto al lungo di Virgin ha senso, e gli slot di BMI servirebbero sicuramente a Virgin.

£175 milioni sono un patrimonio per non comprare una linea aerea.

 

[malpensante]

Beh, ma la comprano, solo che come al solito lo fanno a rate: ora una minoranza e poi il resto, esattamente come hanno fatto con Swiss e faranno con SN.

 

[Cesare.Caldi]

Beh, ma la comprano, solo che come al solito lo fanno a rate: ora una minoranza e poi il resto, esattamente come hanno fatto con Swiss e faranno con SN.

Perchè questo pagamento rateale? Se dopo qualche tempo trovano qualche magagna fanno dietro front e scatta il soddisfatti o rimborsati?

 

[malpensante]

Nel frattempo vogliono essere certi di avere i diritti di traffico (extra UE)

 

[Cesare.Caldi]

Nel frattempo vogliono essere certi di avere i diritti di traffico (extra UE)

Ma non ereditano quelli di BMI?

 

[uncomfortable]

Ma non ereditano quelli di BMI?

I diritti di traffico con certi paesi probabilmente includono la clausola che la linea aerea designata da parte UK sia... una linea aerea inglese. Cosa che LH non é. I tedeschi ovviamente vogliono essere sicuri di poter mantenere i diritti di traffico prima di completare l'operazione.

 

[uncomfortable]

£175 milioni sono un patrimonio per non comprare una linea aerea.

Non necessariamente.
Quel prezzo é per annullare l'opzione put, ovvero per non dover piú comprare la linea aerea ad un prezzo definito 10 anni fa (ovvero £686m, secondo questo articolo).

Per come stanno adesso le cose, hanno pagato £48m per il 35%, e pagheranno un prezzo da definirsi per il resto, se e quando sono pronti e soddisfatti per l'operazione. Mi sembra un miglioramento non da poco.