The Financial Times also reports that IAG is a frontrunner to buy bmi mainline. Unless there is a big deal breaker, it looks like it's going to happen.
IAG in ‘detailed talks’ to buy BMI - FT.com
International Airlines Group has emerged as frontrunner to buy BMI British Midland, Lufthansa’s loss-making UK subsidiary.
IAG - parent of British Airways and Iberia - has entered “detailed talks” with Lufthansa and could conclude an outline deal to purchase BMI this month, which may then need regulatory approval, said people familiar with the situation.