Montreal (with files from CNW,Western Aviation News) – Air Canada and Transat A.T. Inc. announced in June that they finalized Air Canada’s acquisition of all issued and outstanding shares of Transat and its combination with Air Canada. Under the terms of the binding agreement, unanimously approved by the Board of Directors of Transat, Air Canada will acquire all outstanding shares of Transat for $13 per share. The value of the all-cash transaction is approximately $520 million.
The transaction remains subject to regulatory and shareholder approvals and other closing conditions usual in this type of transaction. If such approvals are obtained and conditions are met, the transaction is expected to be completed in early 2020.
According to Western Aviation News, Air Canada will throw money into the deal.
Air Canada has boosted its offer for Air Transat to $18 per share from $13, and won the approval of Transat’s largest shareholder in the process. It will pay $720 million in an all-cash deal for all of Transat’s shares.
With the boost in share price, Air Canada has won over Letko Brosseau, which owns 19.3% of Transat shares and had expressed doubts about the Air Canada arrangement.
The move comes in response to a play by Groupe Mach, which offered to buy 19.5% of Transat shares in order to block the merger. It offered $14 per share, but only if it could buy more than six million shares, enough to potentially block the merger, but not enough to trigger take-over provisions in securities laws.
Even before Sunday’s increased offer, the Transat board urged shareholders to reject the Mach offer.
