Que­bec de­vel­oper Group Mach out of run­ning to buy Transat

The Prince George Citizen - - Money - Julien ARSE­NAULT

MON­TREAL — Group Mach said Wed­nes­day it is no longer in the run­ning to buy Transat A.T., stat­ing the tour op­er­a­tor chose to ig­nore its pro­posal even though it featured a higher price than Air Canada’s of­fer.

Al­fred Bugge, head of merg­ers and ac­qui­si­tions at Group Mach, said Transat was well aware of the Que­bec de­vel­oper’s $14-per-share of­fer last week but forged ahead with an Air Canada takeover agree­ment priced at $13 per share.

“We have no in­ten­tion of sub­mit­ting a su­pe­rior pro­posal as de­fined in the de­fin­i­tive agree­ment be­tween the two com­pa­nies,” Bugge told The Cana­dian Press.

“Transat did not even take the time to com­mu­ni­cate with us. We had no ac­knowl­edg­ment, no phone call, zero,” he said.

“Why would we sub­mit a higher pro­posal again? It would be ridicu­lous.”

Un­der the agree­ment, Transat share­hold­ers will con­vene by Aug. 26 to vote on the Air Canada deal, val­ued at $520 mil­lion. Un­til then Transat can accept com­pet­ing of­fers of at least $14 per share on top of a $15-mil­lion break fee for Air Canada, which could opt to match the su­pe­rior bid.

The cur­rent deal faces le­gal and reg­u­la­tory scru­tiny along with re­sis­tance from Transat share­hold­ers Letko, Brosseau and As­so­ciates and Pen­derFund Cap­i­tal Man­age­ment, which jointly own a 22.06 per cent stake.

The with­drawal may con­cern some ma­jor share­hold­ers who say Air Canada’s suc­cess­ful bid is too low and want more of­fers on the ta­ble.

“We be­lieve Air Canada’s of­fer doesn’t re­flect the value of Air Transat,” Pen­derFund portfolio man­ager Amar Pandya said in an email last week.

Mon­treal-based FNC Cap­i­tal and Que­becor Inc. chief ex­ec­u­tive Pierre Karl Pe­ladeau have pre­vi­ously ex­pressed in­ter­est in Transat.

“We would en­cour­age those in­ter­ested par­ties to make a for­mal of­fer to the board of di­rec­tors,” Pandya said.

Transat de­clined to com­ment on whether the tour op­er­a­tor has re­ceived other pro­pos­als since last week.

Spokesman Christophe Hen­nebelle said then that Group Mach’s of­fer was tech­ni­cally void fol­low­ing the an­nounce­ment of the Air Canada deal, since a condition of the Group Mach pro­posal was that Transat hold off on an agree­ment with the na­tion’s largest air­line.

The two com­pa­nies an­nounced the trans­ac­tion last Thurs­day, which will pre­serve the Transat and Air Transat brands and keep the head of­fice and key func­tions in Mon­treal.

Transat shares dropped $1.10 or more than eight per cent to close at $12.39 on the Toronto Stock Exchange Wed­nes­day.

“We be­lieve Air Canada’s of­fer doesn’t re­flect the value of Air Transat.” — Amar Pandya, Pen­erFund portfolio man­ager

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