An independent proxy advisory firm is urging Transat shareholders to support the proposed $720-million takeover of the tour operator by Air Canada.
Institutional Shareholder Services Inc. recommended on Sunday that shareholders vote in favour of the deal based on the original price of $13 a share and reiterated its support when Air Canada boosted its offer to $18 a share or about $200-million more.
ISS says the acquisition by Canada’s largest airline is supported by the significant premium and certainty of the all-cash offer, execution risks associated with other alternatives and the sale process that gave other bidders time to submit superior offers.
Shareholders are slated to vote on the Air Canada offer Aug. 23, which is expected to face intense scrutiny from the Competition Bureau and other regulatory authorities.
The Montreal-based tour operator’s board and special committee unanimously recommended that Air Canada’s offer “is in the best interest of Transat and its stakeholders and is fair to Transat shareholders.”
Letko Brosseau and Associates – Transat’s biggest shareholder at 19.3 per cent – has now given formal support to the fresh offer from Air Canada, the airline and Transat said. The investment firm said earlier this summer it would vote against the deal if the price stayed at $13 a share.
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