I agree the article looks like a bit of filler. It is August after all.
Richard Branson has sold Virgin Mobile USA, Virgin Mobile Canada and a stake in Virgin Galactic. This may be to hoard cash to buy bmi, or to refinance other Virgin businesses. He has injected cash into Virgin Blue, and I guess may have to do the same for other businesses.
Virgin would be a logical buyer for bmi in theory, but (assuming LH actually do want to sell), the question is whether Richard Branson can raise the cash and support ongoing losses whilst it restructures the business.
The other option is some form of JV between Virgin and LH (based on previous Virgin deals, the likely model would be Virgin contributing VS in return for a share in the JV company). Given that LH's business model is based around feeding traffic into its long-haul networks at FRA etc, I question why LH would want to divert traffic away from that into VS's network when it would only have a minority share of the JV. The other issue is of course Star Alliance and the TATL ATI that LH have with CO and others, and whether Virgin would be prepared to join that.