British Midland basically bought Business Air for the amount of money that they considered it would cost them to bash Business Air off EMA-EDI at the time, where they were competing heavily. Although it put the British Midland brand into Manchester in a meaningful way, I don't believe the acquisition at the time was any more or less strategic than that.
And yes, I do recall a short outing of DC9s and Fokkers on the LBA domestic routes. Didn't last too long if I remember - but that may have been market-led such as through the financial crash and downturn rather than it having been a misadventure to begin with. The LBA operation was helped by having the strong summer weekend presence on LBA-JER backed by Wallace Arnold (as were EMA-JER and LTN-JER) when British Midland picked up the LBA-JER route after Dan-Air ceased. Dan were running 737-200s and BAe146-300s on that in the final year or two, with some fairly big tour operator commitments tied up with coaching operations back in the day. It's a far cry from today's LBA-JER presence, but then again, I suppose you could say that of many UK regional airports.