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Air Transat and Air Canada aircrafts are seen on the tarmac at Montreal-Trudeau International Airport in Montreal on April 8, 2020.

Paul Chiasson/The Canadian Press

Air Canada’s offer to buy Transat AT Inc. is richer than Pierre-Karl Péladeau’s bid for the Montreal-based travel company if investors take the all-stock version of the airline’s takeover bid, an analyst says.

Mr. Péladeau has offered the Transat board $6 a share or $223-million for the company, The Globe reported on Monday, and has urged Transport Minister Marc Garneau to block the Air Canada deal as cabinet weighs final approval of the takeover that would give Air Canada control of about 60 per cent of transatlantic routes.

Transat shareholders on Dec. 15 approved Air Canada’s offer worth $5 a share or $180-million, or 0.2862 of an Air Canada share for each Transat share. The share component is worth about $6.45, based on Air Canada’s share price on Monday.

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Mr. Péladeau’s cash bid for Transat AT Inc. is worth less than Air Canada’s if investors opt for stock, but it will present an alternative if the Air Canada deal is rejected by the federal government or antitrust regulators in Europe, said Konark Gupta, a stock analyst with Bank of Nova Scotia.

“While it appears that Mr. Péladeau’s proposal has already been rejected by Transat, we believe his offer ... should provide support to Transat shares as anti-trust uncertainty ... in the Air Canada transaction persists,” Mr. Gupta said in a note to clients.

Mr. Péladeau is making the offer through his private investment firm, Gestion MTRHP Inc., not through the media company he runs, Quebecor Media Inc.

Mr. Péladeau has the backing of National Bank of Canada, and wants to preserve Quebec jobs and a francophone brand in a province that has seen the recent takeovers or breakups of key companies, including Rona, Bombardier and St-Hubert, according to a person The Globe and Mail is not identifying because they are not authorized to speak publicly on the matter.

Mr. Péladeau presented his plan for the airline to Mr. Garneau in a web meeting in April, the source said.

Through a spokeswoman, Mr. Péladeau declined to comment. A National Bank spokesman declined to comment.

A spokeswoman for Mr. Garneau said Ottawa “is conducting a rigorous review” of the proposed purchase of Transat by Air Canada.

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“Our government ... will be taking a decision that is in the best interests of Canadians and Canada’s air sector,” Allison St-Jean said on Monday.

A source close to Air Transat said the board negotiated with Mr. Péladeau at length and decided his offer, which came with conditions, lacked the certainty of closing during the pandemic that came with Air Canada’s bid. The Globe is not naming the source because they are not authorized to discuss the negotiations in public.

Transat has not confirmed it has received an offer from Mr. Péladeau, and declined to comment for this story. The company said on Dec. 15 it held talks with an unnamed private investor and granted him access to its financial accounts, but decided the offer was not superior to Air Canada’s and did not present it to shareholders for approval.

Shareholders overwhelmingly backed the Air Canada offer.

“There is only one offer that has been presented to shareholders,” said Serge Vallières, a spokesman for the Caisse de dépot at placement du Québec, the third-biggest Transat shareholder with 6 per cent of shares.

The Caisse backed the Air Canada deal, along with Fonds de solidarité FTQ, which holds 12 per cent of Transat, and Letko Brosseau and Associates Inc., which owns 14 per cent in addition to a large stake in Air Canada.

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Peter Letko, senior vice-president of the money manager, said the chance to take Air Canada shares at a discount to their historical trading price made the offer an attractive one.

Patrick McQuilken, a spokesman for the Fonds, said on Sunday that Transat should have told shareholders of the other offer from the unnamed investor.

Mr. Garneau is expected to soon release cabinet’s decision on the Air Canada-Transat deal. The European Commission is expected to rule by Feb. 9. Air Canada can abandon the deal if approvals are not received by Feb. 15.

Transat shareholders in 2019 approved an offer from Air Canada worth $720-million. But Air Canada renegotiated the price in light of the collapse in air travel amid the COVID-19 pandemic.

With a report from The Canadian Press

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