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Despite opposition from some major investors, Transat A.T. Inc. said Tuesday that Air Canada is the “preferred buyer” of the airline and travel company and urged shareholders to vote in favour of its friendly takeover, worth $13 a share, or $520-milllion, on Aug. 23.

In a regulatory filing, the company pointed to assurances from Air Canada that Transat’s jobs and brand will be preserved, while noting the bid offers shareholders a “significant premium.”

Two large Transat shareholders – Letko Brosseau, which owns 19 per cent, and 3-per-cent owner Penderfund – are opposed to the Air Canada offer. Penderfund told The Globe and Mail the Air Canada takeover price is too low while Letko Brosseau said that any deal should wait until Transat’s profitability is restored.

Groupe Mach, a Montreal-based real estate developer, had offered $14 a share for Transat, with financing conditions, before dropping the conditions and finally abandoning its pursuit altogether, declaring the sale process unfair.

Transat’s filing with Canadian securities regulators said it saw no evidence of Mach’s cash or financial ability to complete the deal.

“Air Canada is a preferred buyer with proven ability, skills, experience and expertise to successfully operate in several of the complex and highly competitive fields of activities in which [Transat] operates, including the airline and tour operator industries,” Transat said in the document.

Calls to Letko Brosseau and Penderfund were not returned on Tuesday. A Groupe Mach executive said he needed more time to read the Transat document before commenting.

The takeover talks were initiated by Calin Rovinescu, Air Canada’s chief executive, in an October, 2018, meeting with Transat CEO Jean-Marc Eustache, Transat said in the filing. Over the next several months, Transat fielded calls and expressions of interest from Mach and an unidentified party with “international experience” before deciding in May to exclusively pursue a deal with Air Canada.

Transat left open the possibility it would consider a better offer before the shareholder vote on Air Canada’s takeover, as long as the unsolicited bid met certain conditions and received favourable recommendations from its advisers.

Air Canada has the right to match such an offer.

The takeover, subject to approvals by court, the Competition Commissioner, the federal Transport Minister and European regulators, is expected to be final in early 2020. Two-thirds of shareholders must back the takeover.

Other shareholders, including Fonds de solidarité FTQ, which owns 12 per cent, and the Caisse de dépôt et placement du Québec, which holds a 6-per-cent stake, have declined to comment.

Transat, founded in 1987, flies to 60 destinations with a fleet of about 40 planes and 5,000 employees. Air Canada and Transat together control about 60 per cent of transatlantic flights to Europe, as well as most of Montreal’s air travel market.

Industry analysts – and Transat itself – say the deal is expected to be given a hard look by the Competition Commissioner, who could require Air Canada to cancel some routes or sell certain assets.

The takeover vote follows the takeover of Air Canada rival WestJet Airlines Ltd. by Onex Corp., expected to be approved by shareholders in a vote on July 23.

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