Lufthansa To Decide On SAS' 20% Stake In BMI In Weeks - Source

Deutsche Lufthansa AG (LHA.XE) will attempt to come to an agreement with SAS AB (SAS.SK) over the Scandinavian carrier's 20% stake in British Midland Airways, or bmi, in coming weeks a person familiar with the matter said Wednesday.

The person said the German carrier hopes to come to an agreement with SAS on whether it would acquire the stake, how it would do so if Lufthansa takes the stake and what the terms would be.

Lufthansa increased its stake to 80% earlier this year after bmi's founder, Michael Bishop, exercised an option that forced the German carrier to buy his stake of 50% plus one share. It has now been forced to make an offer under law to SAS, which holds the remaining 20% stake.

Lufthansa has received interest from at least a dozen companies over bmi's future.

The person said Lufthansa's main priority would be to return the loss making company to profit and then make a decision on options on whether to sell the company. Lufthansa's options include selling bmi, parts of it or even keeping bmi.

U.K. based British Airways PLC (BAY.LN) and Virgin Atlantic have both recently voiced their interest in bmi, mainly for the lucrative slots bmi holds at Heathrow Airport.

Company Web site: www.lufthansa.com

-By Kaveri Niththyananthan, Dow Jones Newswires; 4420 7842 9299; [e-mail]