Bmi rejects reports of BA bid interest UPDATE

Bmi rejects reports of BA bid interest UPDATE

	Published : Wed, 28 Mar 2007 14:47 By : Agencies Print this Story

(Adds analyst comment)

LONDON (AFX) - Bmi has rejected reports suggesting it could face a 1 bln stg bid from British Airways, branding the stories 'pure speculation and kite flying'.

The Times and The Daily Telegraph both said BA is mulling a bid, but a spokesman for Sir Michael Bishop, who owns 50 pct plus one share of bmi, rejected the stories.

'These stories are based on pure speculation and kite flying,' Bishop's spokesman told AFX News in a telephone interview this afternoon. 'The 'open skies' deal has just been approved and bmi is set to become a major winner from the agreement ... and I should think there's quite a bit of desire on other people's part to get their hands on bmi.'

The Times report said Bishop had received a number of approaches from carriers looking to buy his stake. It said he had so far resisted, adding potential bidders believed he would sell later this year.

BA would consider a bid if and when Bishop sells, The Times said.

The newspaper added, however, that Deutsche Lufthansa, which owns 30 pct minus one share of bmi, would have the first say in any sale. The remainder is held by Scandinavia's SAS.

The Telegraph said senior BA sources were known to covet bmi, which holds 12 pct of the take-off and landing slots at London's Heathrow airport.

Earlier today, a BA spokeswoman told AFX News that the airline would 'not comment on rumour or speculation'.

Last week's open skies deal prompted press speculation that Virgin Atlantic would renew its interest in acquiring bmi. However, a bmi spokesperson said in a statement that 'bmi is not for sale regardless of what line Virgin keeps trotting out'.

Earlier, a Virgin spokesman said: 'We have always said that Virgin Atlantic, together with bmi, would be a natural combination and bring many benefits to consumers. It is up to bmi to decide on its future structure and strategy. In the meantime, Virgin Atlantic continues to watch developments involving several airlines in the industry worldwide.'

Douglas McNeill, a transport sector equity analyst at stockbroker Corporate Synergy, puts the speculation down to the excitement generated by the approval of the 'open skies' agreement.

'I think this talk involving BA and bmi has come from excitement on the back of the 'open skies' agreement,' McNeill told AFX News this afternoon. 'I personally think BA has too much on its plate with Terminal 5 at Heathrow and I believe it will want to hold on to its cash. However, if a competitor goes in for bmi, I could see BA making a move then.'

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