Virgin makes counter offer for BMI

Virgin makes counter offer for BMI

Virgin Atlantic is looking to scupper the sale of BMI to British Airways parent company International Airlines Group.

Sir Richard Branson’s carrier is reported to have made an indicative offer and signed a “terms of agreement” contract with BMI owner Lufthansa so it can analyse the airline’s books.

The Virgin bid is thought to be in the region of £50 million, against IAG’s offer at about double that figure, excluding pension and restructuring costs, The Times reports today, quoting banking sources.

Virgin Atlantic is hopeful of being able to complete a deal quickly without the regulatory scrutiny that would accompany a BA-BMI takeover. Lufthansa is expected to make a final decision on a buyer for loss-making BMI early in the new year.

IAG and Virgin are keen to acquire the airline and gain control of its Heathrow landing slots, which analysts have valued at about €226 million.

A deal would allow Virgin to create a European feeder network for its Heathrow-based long-haul services. Virgin would be able to co-ordinate its schedules with BMI to enable passengers to transfer from short-haul to long-haul flights at the London hub.

Virgin said: “We have always been interested in BMI and are in constant talks regarding its future.” IAG said last month that it had reached an agreement in principle to buy BMI.

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