Péladeau makes push for Transat
Quebec media executive Pierre Karl Péladeau said he's ready to step in and buy Transat AT Inc. now that the vacation company's takeover by Air Canada is on shaky ground.
In a statement on Twitter late Tuesday, Péladeau reiterated his “interest and determination, as well as my means” to buy Montreal-based Transat.
He made an attempt last year to do so, but Transat had already agreed to sell to Air Canada for $5 a share.
That transaction is now in jeopardy after a Feb. 15 deadline passed without approval from European regulators. Although the deal is still alive, both companies now have the right to walk away.
That means Transat's board is free to negotiate with a new buyer, Péladeau wrote. “I wish to start discussions with the leadership of Transat to enable the Quebec company to exit the grave state of uncertainty in which it's been kept for too long ” and that's threatening its future, he said. “As I have written, let's save Transat, together.”
Péladeau, the chief executive of cable and media firm Quebecor Inc., made earlier approaches to Transat of $5 and $6 a share, according to Transat's disclosures.
The board rejected them, saying they weren't financed and lacked provisions for helping the company with its 2021 working capital needs. Quebecor isn't involved in the deal.
While Air Canada has yet to clarify its position, Desjardins Securities
analyst Benoit Poirier said he expects other interested buyers could come forward, including Onex Corp., the controlling shareholder of Canada's No. 2 carrier, WestJet Airlines Ltd.
“While WestJet's CEO recently expressed his disappointment following the federal government's approval of the deal, we believe the company could also be a potential contender,” Poirier wrote in a note to investors Tuesday. “Such a deal would take time to finalize, although there would be fewer antitrust issues, in our view.”
WestJet CEO Ed Sims criticized the Canadian government's decision last week to allow the deal, saying it would lead to higher prices and reduced service. Onex didn't immediately reply to a message seeking comment.
Air Canada agreed in 2019 to buy Transat for $18 a share, only to cut the price to $5 a share last October to reflect the new pandemic environment.
Transat shares fell 7.8 per cent to $4.85 on Tuesday in Toronto.
Air Canada rose 4.9 per cent to $23.42, the highest in more than a month.
Canadian regulators approved the deal last week with conditions, including a requirement that Air Canada keep 1,500 employees in its leisure travel business, start new routes within five years and keep the Transat head office in Quebec.
But the European Commission hasn't approved the deal yet and has requested more info from the companies. Its decision is now expected in the first half of 2021.
According to Péladeau, Air Canada has been perpetuating uncertainty about the deal for nearly a year-and-a-half in what he termed a threat to Transat's survival.
“By sinking Transat, a direct competitor for the great majority of transatlantic routes and sun destinations, Air Canada would have more than 60 per cent of the market, an unacceptable threshold in any industry,” he said in an open letter sent Saturday to media.