bmibaby-
As I do not think there is any likelihood of Mainline being sold to Virgin I am sure that it is pointless to speculate on the consequences of such a transaction of the other companies (baby and regional). But commonsense says that if mainline were soled large scale funds would be available to Sir Michael to develop these two businesses.
The much bigger question is about whether baby has sufficient strength to survive and prosper in a market which is getting tougher with each day that passes. In such conditions history tells us that airlines in clear and distinct niches will be OK. Airlines that have critical mass and real strength will also be OK. The problem comes when the airline neither has a distinct niche nor critical mass. Ask yourself What is baby's niche? It operates (or will operate) a limited range of services out of four UK airports. (EMA, MAN, CWL and BHX). It is up against head to head competition on all except CWL. I think it is trying to do too much and it therefore needs to concentrate its resources.
While it is so fragmented it would not be an attractive buy for EZY or RYR. but it might appeal to someone like Air Berlin. A merger with German wings is also a possibility but I am not sure what strength could be wrung out of such a business. In the meantime good luck with the rumours thast cllearly abound in your company.