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.