Transat shareholders approve Air Canada's C$720 mln bid for leisure group
(Adds comment from Air Canada, context on domestic regulatory
By Allison Lampert
MONTREAL, Aug 23 (Reuters) - Transat AT Inc
shareholders on Friday overwhelmingly voted in favor of Air
Canada's bid for the leisure group, in a deal that still
requires domestic and European regulatory approval.
Air Canada offered C$720 million ($540.70 million), or C$18
a share, bid for the tour operator, which runs leisure carrier
Air Transat. Air Canada sweetened its initial C$13 a share offer
for Transat, locking up support from the tour operator's largest
shareholder Letko Brosseau.
Canada's largest carrier said the Transat acquisition would
bolster its leisure travel business after the deal closes, which
is expected in 2020.
Despite offers from other rivals, including a Montreal real
estate group, Transat Chief Executive Jean-Marc Eustache told
shareholders that: "Air Canada’s offer was the only viable
Quebec businessman and former politician Pierre Karl
Peladeau had said he would vote against Air Canada’s offer and
consider making a separate offer with partners if the deal
fails. Peladeau owns a 1.6% stake in Transat.
The deal would give Transat a 60% market share of select
transatlantic routes to and from Canada, and would require
approvals from domestic and European competition regulators.
Transport Canada has until Wednesday to determine whether
the deal raises issues of public interest, such as competition
concerns and fares, which would require a formal assessment.
Eustache said there were never plans to sell Transat, but
inquiries from Air Canada sparked questions about the company’s
future as it struggled to compete against larger international
"The problem is the competition," he said, which raised
questions over whether Transat "would survive alone."
Two other major shareholders, Quebec pension fund Caisse de
depot et placement du Quebec, along with the Quebec Federation
of Labor's Fonds de solidarite, said in statements that they
approved the deal.
In a statement, Air Canada CEO Calin Rovinescu called the
result "the best possible outcome for all stakeholders."
Transat closed down 2.5% to C$16.29 a share in Toronto
(Reporting by Allison Lampert
Editing by Marguerita Choy)
First Published: 2019-08-23 18:16:18
Updated 2019-08-23 22:58:29
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