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Branson bidding for bmi - admitted on Radio 4

Branson bidding for bmi - admitted on Radio 4

Old Oct 21, 06, 12:03 pm
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Exclamation Branson bidding for bmi - admitted on Radio 4

Heard today when driving along. Had to check again, but I don't think it was an intentional slip....

"...we're trying to buy british midland..."

Listen yourself to The Bottom Line on Radio 4 listen again

http://www.bbc.co.uk/radio4/progs/listenagain.shtml#b

At the time of posting, it shows last weeks programme when you play, but it has been updated with todays episode. Listen from 4:00 minutes in, the juice is after about 4:30.

(I know there is a rumour thread, but I thought this was a bit of a scoop)
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Old Oct 21, 06, 1:10 pm
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I don't know, it didn't sound like he was trying to keep it a secret to me.
I think he intentionally dropped that in there, maybe to get SMB and other stakeholders riyal. It's no secret he's been trying to make takeover attempts in the past, but also in the context of what he was saying, it doesn't necessarily bring about any new knowledge. Combined with the other thread about takeover rumours however...that does make it a bit more interesting, but then again...much of politics works on rumours and takeovers involve a lot of politics, especially in the aviation industry.

I've made a transcript of the interesting part of that show before it goes offline.

Interviewer = Evan Davis (ED)
Taking about business philanthropy and environment.
Specifically about Richard Branson's recent green energy revolution pledge.
ED: Have you felt peer-pressure to do something about this, because environment has become the issue of the year, and did you feel a sort of a need, to be on the green side of the line rather than the other side?

RB: I'm not sure it's so much peer pressure, urm I think that you do things for lots of different reasons. We are in the airline business and airlines emit about two percent of the CO2...you know, yes maybe I've got a conscience, should..we should [laugh], should we're..if you're in a position to do something, you should do it.

ED: "and what about the Greens who say, look this is ridiculous, you can't run an airline and, be green"

RB: "we're, we're we're trying to buy British Midland so this isn't completely self serving.
Urm, you could argue that short haul airlines when people could choose trains could be taxed and people should be discouraged from flying on short hauler planes when you've got alternative, far more CO2 friendly ways of travelling.

On long international flights there's no alternative but to fly on a plane, so I think on those you just got to invest money on getting the planes more efficient, trying to persuade the airline manufacturers to make the planes out of lightweight materials rather than metal, and try to come up with alternative fuels and invest a lot of money in trying to do that."

ED: Right, let's open it up...

Last edited by jbfield; Oct 21, 06 at 1:17 pm
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Old Oct 22, 06, 7:53 am
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Hmm maybe the thing I heard on the BBC wasnt just rumours then !!!
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Old Oct 22, 06, 12:25 pm
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SRB has mentioned this before in recent weeks

Besides the mention last Friday by the presenter on BBC 24 Business news, SRB also mentioned if Virgin was to take over BMI, it would drop the route to Manchester.

SRB said this when he was interviewed initially when he launched the green initiative.

I guess time will tell, if Virgin does take over bmi, lets hope they keep Cash and Miles.
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Old Oct 22, 06, 12:46 pm
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Originally Posted by frankdjs
Besides the mention last Friday by the presenter on BBC 24 Business news, SRB also mentioned if Virgin was to take over BMI, it would drop the route to Manchester.

SRB said this when he was interviewed initially when he launched the green initiative.

I guess time will tell, if Virgin does take over bmi, lets hope they keep Cash and Miles.
And why wouldn't he, there are trains plying that route for higher fares
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Old Oct 23, 06, 5:08 am
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Evan Davis either didn't get what the bearded one was saying or didn't want to get it - otherwise he would have asked a follow up question.

I will certainly burn my (cash +) miles quickly with BMI - who knows what it will be enhanced to !?
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Old Oct 23, 06, 6:04 am
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I'm busily planning for three long haul F returns next year and hope to have this done before any take over is formalised. Personally, I would hope for an LH take over as this is in *A and I would expect them to give BD*Gs two years of Senator.

Branson's ideas, while noble are quite crazy in the current market. BA must be very excited at the prospect of no more BD MAN-LHR.
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Old Oct 23, 06, 6:34 am
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I think that you are all forgetting that Branson has been eying BD for many many years now. This is certainly nothing new. Having said that, I cannot see SMB, LH or SK getting rid of their investment at this stage.

You also need to remember that MB does not own VS 100%. SQ still have their 49% share and may not be interested in puchasing BD.

I hate to say it, but seeing this again makes me think that these are the sorts of stories that come out on slow news days or weeks.
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Old Oct 23, 06, 6:57 am
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I think there is more to Branson's ideas than he lets on.

I can't help but think most of the Virgin Group's Transport companies' profits being donated to the environmental cause involve a bit of creative accounting. As more and more environmental factors come to play in the economy so will the need for less environmentally damaging products and services. By investing in such products now and after making such a grand PR statement, he gets to make quite a mark, let alone allow himself to get a foot hold in the developing alternative fuels and technology sector, as well as the more environmentally aware consumer market.

Additionally most of the ideas he's supposedly coming up with to reduce fuel consumption (and hence also costs) are out there being developed already, e.g. the self tugging aircraft gear. I have suspicion that he's made some calculations, figured that he can meet his 'personal environment targets' using such devices and appeal to the growing environmentally aware market as though he's taking big initiatives to reduce his company's impact.
By being the first brand icon to publicly do this, he ends up with the most credit/identity in the eyes of Joe Public, and thereby most share of this developing market.
Let's be honest, if BA or BMI came out and said they were increasing fuel efficiency, Jo public would regard this as a way to reduce overheads rather than 'benefit the environment'.

I'd also be very interested to know how his Virgin Fuels investment unit works - is it a registered company or a charity?
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Old Oct 23, 06, 7:19 am
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Virgin Fuels is to be a proper "for profit" company.

The money Branson will invest is not dependant on the actual profits of the airline - he will put in the £3bn anyway. There is a lot of money to be made in alternative fuels and Branson is keen to ensure much of it flows his way.
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Old Oct 23, 06, 3:07 pm
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Originally Posted by Raffles
Virgin Fuels is to be a proper "for profit" company.

The money Branson will invest is not dependant on the actual profits of the airline - he will put in the £3bn anyway.
Ahh, ok, so no tax-break plans then. I guess it has more credibility this way too.
Originally Posted by Raffles
There is a lot of money to be made in alternative fuels and Branson is keen to ensure much of it flows his way.
Precisely my thinking, albeit more succinctly put!
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Old Oct 26, 06, 3:03 am
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The saga continues:

25/10/2006 Virgin denies it is in negotiations to acquire BMI

Virgin Atlantic Airways, the UK airline, scotched rumours that the company is in negotiations to acquire British Midland Airways [BMI], a UK-based short-haul airline.
Virgin was said to be having in-depth discussions to acquire the carrier, enabling Virgin to gain a short-haul hub within the UK, said several sources and an analyst. However, a Virgin Atlantic spokesperson strongly denied the company was in talks. They said: “There have been no discussions. However Virgin is still interested in acquiring BMI but the ball was left in BMI’s court two years ago. The carrier would give Virgin a strong short-haul hub in the UK and complement Virgin Express, our short-haul carrier in Europe.”

Sir Richard Branson and Michael Bishop, BMI’S chief executive officer, met in 2004 to discuss possible options but BMI never got back to the long-haul airline.
According to the spokesperson, the recent rumours spread after Branson said on a national radio station that Virgin was still interested in BMI.

However the spokesperson added that Virgin may be able to acquire a stake in BMI towards the end of 2008. He said: “Lufthansa, which owns a 30% stake in BMI, has to sell its stake, with an end date of 2008, due to an arranged agreement. We will wait until the opportunity arises with Lufthansa. Then we will be able to acquire a stake in BMI.” Virgin has a strong relationship with BMI. Both carriers have code-share agreements.
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Old Oct 26, 06, 4:24 am
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Hmm, interesting. Isn't Virgin Express getting ready to tie up with SNBA properly? Would be interesting to see where that one went - BA/VS/SN, some nice connections possibilities at Zaventem...

Anyway. Still all conjecture. Still, I'd like to see VS buy BD, if only because it looks like we're about to get a corp deal for VS UC
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Old Oct 26, 06, 7:05 am
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Originally Posted by Traveloguy
You also need to remember that MB does not own VS 100%. SQ still have their 49% share and may not be interested in puchasing BD.
And I thought MB didn't own any % of VS.
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Old Oct 26, 06, 3:17 pm
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It would be delighted if they bought BMI, its need a fresh injection of energy. But I fear they will destroy the Diamond Club, specifically Cash + Miles. This is, Im sure, the single greatest benefit for DC members and the reason half of us fly BMI and *A in general. If this is gone, I don't think even Clubhouse lounges in EDI would keep me flying BMI/Virgin.
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