Sir Michael Bishop has increased his stake in the bmi group, Britain's second-biggest full-service scheduled airline, by buying out the two minority partners who helped found the company with him.
British Midland, bmi's parent company, announced yesterday Sir Michael had acquired the 49.8 per cent stake in the BBW Partnership previously owned by Stuart Balmforth and John Wolfe. Sir Michael already owned the other 50.2 per cent. No details were given of the price paid.
BBW already has 50 per cent plus one share of British Midland so Sir Michael's manoeuvre does not change his overall control of the airline. But it does mean he has a little more than half the economic interest in bmi as well. The remaining shares are owned by the German flag carrier Lufthansa, which has 30 per cent less one share, and the Scandinavian airline group SAS, which owns 20 per cent.
A spokesman for Sir Michael denied the move was a tidying up exercise before he used a "put" option to force Lufthansa to buy out his shareholding in bmi. The option is exercisable until 2009 and would require Lufthansa to purchase Sir Michael's shareholding on the same terms that it bought into bmi in 1999. That would value Sir Michael's stake at £229m.
The spokesman said that, on the contrary, Sir Michael's decision to increase his shareholding demonstrated his long-term commitment to the airline. Sir Michael has been lobbying for several years to be allowed to start transatlantic services from Heathrow where bmi holds about 14 per cent of the take-off and landing slots.
Lufthansa tried frantically to dispose of its bmi stake last year before the put option came into effect, approaching British Airways and Virgin Atlantic to see if they were interested. But Sir Michael used his controlling stake to block Lufthansa.