Air Canada’s $520-million purchase of Transat not done deal yet
Air Canada has reached a deal to buy Transat A.T. Inc. for about $520-million, the companies announced Thursday, but the $13-pershare transaction still faces a number of potential obstacles, including scrutiny from regulators, the apprehension of a few major shareholders and the possibility of bids from a rival suitor.
“For shareholders of Transat and Air Canada, this combination delivers excellent value, while also providing increased job security for both companies’ employees through greater growth prospects,” said Calin Rovinescu, president and chief executive at Air Canada, in a press release.
The price-tag on the allcash “definitive” arrangement agreement is essentially the same as was announced in May, when airline and tour operator Transat said it had agreed to 30 days of exclusive talks with Air Canada. But at $13 per share, the price is below that of a bid from Quebec real estate developer Group Mach Inc., which proposed acquiring Transat for $14 per share.
“This fully-funded cash transaction is the ideal platform for Transat’s presence and jobs in Montreal, and therefore represents the best option for all our stakeholders: employees, suppliers, partners and shareholders,” said JeanMarc Eustache, president and CEO of Transat, in the release.
The transaction is anticipated to be complete in early 2020, the companies said, but only so long as it receives all the necessary regulatory and shareholder approvals and meets all the closing conditions.
“With a deal still far from a certainty, we are not making any changes to our forecast or valuation at this time,” wrote Cameron Doerksen, analyst for National Bank Financial, in a note. “If a deal is consummated, we see it as positive for Air Canada.”