Bishop settles bmi sale wrangle with Lufthansa

CHESHIRE-born airline tycoon Sir Michael Bishop, founder of bmi,  will make £223m from the sale of his half-share in the carrier after settling a legal action with Germany’s Lufthansa.

Lufthansa, which already owns 30% of bmi, struck a deal with the Bowdon-born Bishop in 1999 to buy out his stake at a later date.

In October last year, Mr Bishop  exercised his right to sell the rest of his interest (50% plus one share), which would have forced the Germans to hand over about £287m.

With the value of airlines having fallen due to the recession Lufthansa questioned the deal, which led to legal action between the parties.

Under a settlement agreed yesterday Lufthansa will pay £175m to Bishop to cancel the previous agreement, known as a put option. It will also hand him £48m for his stake in bmi.

In a statement the German airline said: “By this transaction, Lufthansa is expanding its interest in an airline whose strategic asset is its control of more than 11% of all the take-off and landing slots at London Heathrow, Europe’s largest airport.

“In recent years, however, bmi has experienced increasing financial challenges. These have been strongly exacerbated by the sharp rise in fuel prices in the past year and the ongoing global economic crisis.”

Both bmi and Lufhansa currently operate out of Manchester Airport.