The Air Canada deal is expected to close next year, and would give Canada’s largest airline access to Transat’s fleet of Airbus passenger jets at a time Air Canada’s Boeing 737 Max planes are part of a global grounding.Ryan Remiorz/The Canadian Press
Montreal real estate developer Group Mach Inc. has made an offer to buy almost 20 per cent of Transat A.T. Inc., with the intention of stopping Air Canada’s takeover of the airline and travel company.
Mach said on Friday it will pay $14 a share for 6.9 million class B shares in Transat, higher than the $13 price Transat and Air Canada agreed to on June 27. Two-thirds of Transat shareholders must approve the $520-million Air Canada offer on Aug. 23.
Mach said it will vote all shares it buys against the Air Canada offer, marking a new tack in its attempt to block the deal.
Christophe Hennebelle, a Transat spokesman, said the company’s board is reviewing the Mach offer and will make a recommendation to shareholders at an unspecified date.Transat is telling shareholders to not tender their shares to Mach until then, he said.
Mach previously made – and then withdrew – a $14 offer for all Transat shares.
Transat’s board of directors has recommended the Air Canada offer, saying it is a good deal for shareholders and will offer job security to its 5,000 employees, even as major shareholders have said they opposed Air Canada’s offer.
Letko Brosseau, a Montreal investment company and Transat’s biggest shareholder at 19 per cent, has said Transat should restore profitability before any deal should take place. Penderfund Capital Management of Vancouver, which is Transat’s fifth-biggest shareholder with 3 per cent, has said Air Canada’s offer is too low.
Should Air Canada’s takeover be approved by shareholders, it is expected to face close scrutiny by Canada’s Competition Commissioner. Between them, the companies control at least 60 per cent of transatlantic flights and much of the Montreal travel market.
Transat has a fleet of about 40 planes, depending on the season, and a travel business that sells vacation packages in sun destinations.
The Air Canada deal is expected to close next year, and would give Canada’s largest airline access to Transat’s fleet of Airbus passenger jets at a time Air Canada’s Boeing 737 Max planes are part of a global grounding.
The battle for Transat highlights the consolidation Canada’s already-oligopolistic airline market. Shareholders of Calgary-based WestJet Airlines Ltd. recently approved a $3.5-billion takeover by Toronto-based investment company Onex Corp. in a move that takes private Canada’s second-biggest airline.
Representative of Mach could not be reached for comment on Friday.
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Eric Atkins