Quebec billionaire Pierre Karl Péladeau is weighing a bid for Transat A.T. Inc., joining several other local buyers expressing interest in the struggling holiday travel company.
The media magnate, chief executive and controlling shareholder of Quebecor Inc., confirmed on Thursday that he has hired an investment banker to advise him on a potential offer for Montreal-based Transat. He suggested part of his motivation for getting involved in the process was to prevent the company from falling into the hands of non-Quebec interests.
“I will continue to fight for Quebec companies to stay here,” Mr. Péladeau told reporters after Quebecor’s annual investor meeting. “It’s a good brand. Quebeckers like Transat. I’ve been flying many times on Transat planes. I appreciate the service. I appreciate the company.”
The development adds to the intrigue surrounding Transat’s future and increases the chances that if the company strikes a deal with a buyer, the suitor would be based in Quebec and sensitive to Premier François Legault’s government’s desire that it maintain its headquarters here. Mr. Péladeau said that “for now,” he’s acting on his own behalf and that Quebecor is not involved, although he left the door open to the company’s future involvement.
Mr. Péladeau joins Montreal real estate entrepreneur Vincent Chiara as the only two suitors to publicly declare their interest in Transat. Mr. Chiara, owner of Montreal property-development firm Groupe Mach, told the Journal de Montréal he has already submitted an offer for the travel company. He did not respond to requests for comment from The Globe and Mail on Thursday.
Transat, which sells vacation packages and operates a holiday travel airline, announced last week it had entered preliminary talks with more than one potential suitor that could lead to the sale of the company. It did not identify the suitors, but media reports have named Calgary-based WestJet Airlines Ltd. and Montreal-based Air Canada as the companies who made the approach. WestJet and Air Canada have declined to comment.
News that Transat was in play sent the company’s stock soaring but also raised fears in Quebec’s legislative halls of power that the province could lose another corporate head office. The issue has been a sensitive one and successive Quebec governments have struggled with how to handle unwanted takeovers of its corporate champions without alienating outside investors and causing a market chill.
In Quebec City on Thursday, Economy Minister Pierre Fitzgibbon said several Quebec-based entrepreneurs have expressed an interest in exploring a bid for Transat. He declined to name the potential buyers but cautioned that such a takeover would not be for the faint of heart because the airline and travel industry is highly competitive, with many companies failing over the years.
“We’re not surprised” by the interest, Mr. Fitzgibbon told reporters. “But it’s not an easy business. This is for grown-ups who are, quote unquote, well-informed."
Transat has fared poorly in recent years under increased pressure from Air Canada and WestJet, which have both boosted their offerings to sun destinations while challenging Transat on routes to Europe. The company is now trying to execute a major shift in strategy by increasing its investments in hotels, which is a higher-margin business.
The Quebec government remains ready to provide financial backing to a local buyer if asked and provided they have a credible business plan for Transat, Mr. Fitzgibbon repeated on Thursday. The objective is to maintain Transat’s head office and employment, he said.
“We don’t want to participate in a bidding war,” Mr. Fitzgibbon said. “We have to be prudent. We can’t commit money if the takeover price doesn’t make sense."