VS/BMI Merger Rumour Again!

Yet again another thread being started and discussed on pprune about the possibility of VS&BMI merging/taken over (your choice of terms )

Key post on the thread (by Fokker):

quote:
OK. Look. This is definite. It came from the Costa Coffee manager in T3:

Branson and Bishop have finally sorted out their differences (no, not that one!) and the deal is with the lawyers for final approval. The beardy one has bought the whole show for an undisclosed sum. The keys factors are:

- The amalgamated company will commence long haul transatlantic operations using bmi A330s from LHR 'as soon as possible'.

- bmi mainline crews will operate a full 'mixed fleet' schedule combining short- and long-haul operations, 'difference' courses to commence on a rolling programme with the manufacturer in August.

- Balpa pay claims for bmi crews to be met in full and backdated to the 'no rise' point of April '03.

- Donington Hall to close by the end of '04 with all ops functions parented at LGW.
............ I think that's what he said, anyway.



I know the source is not perfect but hey thats how rumours begin[:I]

Full Thread

http://www.pprune.org/forums/showthread.php?s=d66b1fc76a00e75c257190133edb2d04&threadid=135553

How I love gossiping when I'm meant to be working - but this is far more interesting than the redesign of New Street station!:D:D:D

To add to the rumor mill, Virgin have said that one of the reasons they're closing Travelstore is to concentrate on the expansion of VS!
See link below:
http://www.v-flyer.com/forum/topic.asp?TOPIC_ID=1682

Still find it hard to see how they could merge/take over when BMI is effectively owned by Lufthansa and SAS.

Alex

[Pete]

Isn't the single biggest shareholder Sir Mikey Bishop anyway? If he and the bearded one are now on talking terms again, maybe the deal is actually done.

Pix

Pix - you're right - apologies for my mistake. Sir Mikey B and his chums own 50%. BBW was formerly known as Airlines of Britain.

BMI Shareholding:
BBW 50%
Lufthansa 30%
SAS 20%

Would be interesting though, if it were true, how they would deal with SK and LH.

[Pete]

If it's an outright sale and absorption into VS, then I guess that means SK & LH take their appropriate share of the proceeds and walk away. If it's a merger, maybe that means SK & LH get a smaller slice of the larger company.

Mind you, this all comes from the manager of the Costa Coffee manager in T1. If it had been the Claire's Accessories manager in T3, it would have been far more believable. Between bangles and belts, nothing gets past that woman...

[Bazz]

Pix, Bangles and Belts... I'm getting a bit worried about you.

quote:If it had been the Claire's Accessories manager in T3, it would have been far more believable

Thanks pix that just made me spit coffee all over my PC

[Nottingham Nick]

Provided that the terms of the merger / take over are not of detriment to current VS / BMI customers, then I don't see a down side, but I am prepared to have the pitfalls pointed out to me:) Gently, though please;)

I realise the Star Alliance thing will start up again.

Nick

quote:Originally posted by pixuk
If it had been the Claire's Accessories manager in T3, it would have been far more believable. Between bangles and belts, nothing gets past that woman...

Pfffffffffffbt /score one monitor ROTFLMFAO!

Cheers

Michael

This is still a rumour!!
But IF it did happen the MMC shouldn't have a problem as VS/BMI wouldn't affect market share too much as BMI is mainly short haul and VS long haul

but would VS join *A?
lets hope not or the clubhouses would have to downgrade or maybe VS would use BMI Lounges for *A and keep Clubhouses for UC and AUFC?

these are just my thoughts not the opinions of anyone in the know;)

[Pete]

Taking the macro view, this entirely fits with Branson's long term goals. He always wanted Virgin Express to be his domestic version (in Europe) of Virgin Atlantic, but it never quite gained the routes or growth that it needed to become a serious competitor in Europe. Earlier this year, Branson did a deal which effectively gives him an exit from Virgin Express and also allows him to use the Virgin name on a separate European airline. For a long time now he has been looking at bmi as the perfect fit for his domestic plans. A strong presence out of Heathrow, more UK centric, routes to all the major European destinations and now their international growth out of Manchester gives him the ready-made expansion in the North you just know he would love to grab (and yes PaulS, perhaps enough muscle up there to finally put in a proper clubhouse and full UC service).

Whether a VS buyout of bmi would create a separate Euro carrier (Virgin Red, Virgin Europe, or whatever) and the absorption of the international routes into the Virgin Atlantic fold is open to speculation. Personally I think it's a great fit, and to the benefit of both companies. It'd also worry the hell out of BA, and that always has some novelty value.

Pix

is there a website that lists each carrier the no & type of a/c and routes they fly?

I just wondered how BA would size up to a VS/BMI fleet[?]

well VS operate:
2 742
13 744
9 A343
6/7 A346

total=30/31

BMI:
3 A332
10 A321
11 A320
3 A319
3 F100
9 ERJ145
2 ERJ135

total= 41

BMI baby:
5 733
8 735

total = 13

overall total = 84/85 (inc. VS)



British Airways (as of end 2002)
Concorde - 7
747-400 - 56
777-200 - 43
767-300 - 21
757-200 - 16
A319 - 33 (+ 3 to be delivered, 99 options)
A320 - 23 (+ 7 to be delivered)
A321 (10 to be delivered)
737-300 - 21
737-400 - 29
737-500 - 10

total= 259

CitiExpress
ERJ145 - 28 (+ 10 options)
RJ100 - 16
BAe146 - 5
Jetstream 41 - 12
ATP - 13
ATR 72 - 5
DHC-8 - 10
total= 89
overall total= 348

Its been announced an the news this morning that SRB is selling Virgin Mobile, well, stock exchange IPO.
Now, I wonder what he is going to do with all that money????

The key questions that remain unanswered at the moment are:
How much new money will Virgin Mobile raise by selling newly created shares? and
How much will SRB raise by selling some of his own shares at the same time?
Note: City institutions do not take too kindly to the original investor (SRB) bailing out in full at flotation. It looks too much like they are being sold a pup. SRB will probably sell a small amount of shares and agree to a lock-in period of, say, 12 months, during which he cannot sell any more.
The answer to the second question may lead to a good guess as to how much cash is need to fund the BMI deal.

According to the FT
The shares will raise £1billion ($1.8 billion) and 40% of the shares will be available for sale

Having seen today's Times it seems that:-
The enterprise value of Virgin Mobile is ca.Pnds 1 bn, which includes Pnds 300m of debt, meaning SRB's shares are worth Pnds 700m. If he sells 40% of those shares he raises Pnds 280m of which he has to pay Pnds 100m to T-Mobile. SRB (not Virgin Mobile) will also have to pay the costs of the IPO, say Pnds 30m, leaving him with Pnds 150m cash. Out of this will come a hefty Capital Gains Tax bill but I am sure there are capital losses elsewhere in the group that can be used to offset the gains.

Maybe I'm jumping to conclusions, but this press release:

http://biz.yahoo.com/prnews/040629/latu003_1.html

says that Virgin Atlantic are appointing Discover to market the brand in Belgium, Italy, France, Spain and other european countries. If they are not going to operate services from these countries why spend money on it? Are they prepairing for a bmi takeover and want the people of these countries to be aware of the Virgin brand before a name change?

That is very interesting, to get the brand more advertising, you have to get the "punters" to where your flights leave from, so it may have some sense that a European feeder route supplier will be needed.......

A new deal has just been signed between VH and BMI. They are releasing a Manchester brochure and it will feature BMI's caribbean flights!

http://www.virgin.com/news/default.asp?newsid=267&p=0

maybe SRB will buy back some of the 49% SQ hold of VS!