Jack,
I've keenly followed bmi for many years. You seem to forget that LH had a minority holding and seats on the board in bmi since 1999. The condition of bmi could have been absolutely no surprise to LH, but they absolutely did not want the airline at the time it was forced on them by Bishop, to the point of an out-of-court settlement.
Non-EU "merger" partners are unlikely, due to regulatory requirements. There aren't a lot of likey EU partners. flyBe has a market value in the region of GBP 68 million. Hardly a financial merger, more a buy-out, although operationally much more so. But what does flyBe add to the EI network? No connectivity with DUB, no relaibly profitable UK operations, no strong, reliable brand to market.