Skip to main content
The Globe and Mail
Support Quality Journalism.
The Globe and Mail
First Access to Latest
Investment News
Collection of curated
e-books and guides
Inform your decisions via
Globe Investor Tools
Just$1.99
per week
for first 24 weeks

Enjoy unlimited digital access
Enjoy Unlimited Digital Access
Get full access to globeandmail.com
Just $1.99per week for the first 24weeks
Just $1.99per week for the first 24weeks
var select={root:".js-sub-pencil",control:".js-sub-pencil-control",open:"o-sub-pencil--open",closed:"o-sub-pencil--closed"},dom={},allowExpand=!0;function pencilInit(o){var e=arguments.length>1&&void 0!==arguments[1]&&arguments[1];select.root=o,dom.root=document.querySelector(select.root),dom.root&&(dom.control=document.querySelector(select.control),dom.control.addEventListener("click",onToggleClicked),setPanelState(e),window.addEventListener("scroll",onWindowScroll),dom.root.removeAttribute("hidden"))}function isPanelOpen(){return dom.root.classList.contains(select.open)}function setPanelState(o){dom.root.classList[o?"add":"remove"](select.open),dom.root.classList[o?"remove":"add"](select.closed),dom.control.setAttribute("aria-expanded",o)}function onToggleClicked(){var l=!isPanelOpen();setPanelState(l)}function onWindowScroll(){window.requestAnimationFrame(function() {var l=isPanelOpen(),n=0===(document.body.scrollTop||document.documentElement.scrollTop);n||l||!allowExpand?n&&l&&(allowExpand=!0,setPanelState(!1)):(allowExpand=!1,setPanelState(!0))});}pencilInit(".js-sub-pencil",!1); // via darwin-bg var slideIndex = 0; carousel(); function carousel() { var i; var x = document.getElementsByClassName("subs_valueprop"); for (i = 0; i < x.length; i++) { x[i].style.display = "none"; } slideIndex++; if (slideIndex> x.length) { slideIndex = 1; } x[slideIndex - 1].style.display = "block"; setTimeout(carousel, 2500); } //

Air Transat and Air Canada aircraft sit on the tarmac at Trudeau International Airport in Montreal on April 8, 2020.

Paul Chiasson/The Canadian Press

Air Canada’s planned takeover of rival Transat A.T. Inc. is now up in the air after a Feb. 15 deadline the companies set to complete the deal passed while they await approval from European regulators.

The two companies have been discussing unspecified “potential amendments” to their deal that could keep it alive, Transat said in a statement Tuesday. But Air Canada won’t agree to extend the deadline, which means either company now has the right to walk away at any time, Transat said.

“At this time, it is difficult to gauge Air Canada’s commitment and engagement regarding the proposed transaction as market conditions have deteriorated over the last months,” Desjardins Securities analyst Benoit Poirier said in a note, adding that he expects other parties will step up and show their interest in Transat.

Story continues below advertisement

Montreal-based Transat disclosed on Jan. 12 that it had received an unsolicited takeover proposal, without demonstrated committed financing, of $5 a share from an investment firm controlled by Quebec media magnate Pierre Karl Péladeau. Toronto-based investment manager Onex Corp. and Calgary-based WestJet Airlines Ltd. could also be interested, according to Desjardins.

Transat shares fell 8 per cent, to $4.82, in Tuesday morning trading on the Toronto Stock Exchange. Air Canada stock rose 2 per cent, to $22.82.

In a post on his Facebook page Saturday, Mr. Péladeau said he believed Air Canada would be unable to conclude the transaction by the Feb. 15 deadline and accused Canada’s dominant airline of delaying the European regulatory analysis by failing to provide information in a timely way.

“Transat board members will regain the freedom allowing them to ensure the company’s continuity, its outreach in the community and the considerable economic benefits it holds for Quebeckers,” Mr. Péladeau wrote. “I invite them to find reasonable the terms of an agreement with my group so we can save Transat, together.”

Mr. Péladeau reaffirmed in a statement late Tuesday his desire to buy Transat and said he wants to start talks with the company to allow it to “get out of the uncertainty” that has plagued it for some time.

Air Canada spokesman Peter Fitzpatrick said the agreement remains in place unless and until either party terminates it. He said there was no update beyond that, adding that the company’s ability to discuss the transaction is “limited by various confidentiality, governance, contractual and other considerations.”

Montreal-based Air Canada announced its intention to buy Transat, an international tourism company specializing in holiday travel, in June, 2019, shortly after WestJet said it was being bought by Onex. Air Canada subsequently hiked its bid to $18 a share to win over hesitant Transat investors for an equity consideration of about $720-million.

Story continues below advertisement

That offer was revised downward to about $190-million after the pandemic hit, given the prospects for all airline companies amid the collapse in demand for air travel. In December, Transat shareholders approved Air Canada’s new offer of $5 a share in cash or 0.2862 of an Air Canada share for each Transat share.

The Canadian government approved the takeover last week but applied conditions to a deal, including a minimum number of jobs that must be preserved. Ottawa said that in reviewing the deal, it took into account the pandemic’s effect on the companies and concluded the takeover was in the public’s best interest.

The European Commission also has to approve the deal because the two companies have a large presence in that market. The EC suspended its investigation of the deal in late December as it awaited more information from the two carriers.

Your time is valuable. Have the Top Business Headlines newsletter conveniently delivered to your inbox in the morning or evening. Sign up today.

Your Globe

Build your personal news feed

  1. Follow topics and authors relevant to your reading interests.
  2. Check your Following feed daily, and never miss an article. Access your Following feed from your account menu at the top right corner of every page.

Follow the author of this article:

Follow topics related to this article:

View more suggestions in Following Read more about following topics and authors
Report an error Editorial code of conduct
Tickers mentioned in this story
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

If you do not see your comment posted immediately, it is being reviewed by the moderation team and may appear shortly, generally within an hour.

We aim to have all comments reviewed in a timely manner.

Comments that violate our community guidelines will not be posted.

UPDATED: Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies