Lufthansa Agrees Revised bmi Takeover Deal

The Executive Board of Lufthansa has finally reached agreement with Sir Michael Bishop over the sale of his majority stake in UK carrier bmi. The UK entrepreneur, through his holding company The BBW Partnership Limited (BBW), had exercised a put option last year forcing the German flag carrier to purchase his 50% plus one share stake in the company. However, Lufthansa had argued that there were a number of conditions that Sir Michael Bishop would have to fulfil before it would proceed with the deal, including a cash injection to maintain the liquidity of the company. The UK airline posted a loss of almost £100 million after tax for the 2008 calendar year.
BBW launched High Court action against Lufthansa in May after negotiations over the sale stalled. However, it confirmed on June 22 that the put option would no longer stand and it had agreed that it was no longer necessary for the German airline to acquire the shares after it agreed to pay consideration of £175 million for the cancellation of the deal. Lufthansa has now negotiated a revised deal that takes effect from July 1. Through UK-based investment group LHBD Holding Limited (LHBD), in which it holds a 35% stake, it has acquired the majority stake in bmi for £48 million. After obtaining the necessary traffic rights, Lufthansa will then acquire full control of LHBD.