Abu Dhabi, UAEMonday 19 August 2019

Air Canada raises offer for tour operator Transat by Dh554m

Airline's move is an attempt to fend off an unsolicited bid from Group Mach, a Quebec real-estate developer

Air Canada has boosted offer by 38 per cent. Courtesy Air Canada
Air Canada has boosted offer by 38 per cent. Courtesy Air Canada

Air Canada boosted its takeover offer for Transat AT by 38 per cent, or C$200 million (Dh554.5m), securing support from the Quebec-based international tour operator’s largest shareholder in the process.

Air Canada said late Sunday it will raise the purchase price to C$18 a share from C$13, bringing the value of the all-cash offer to C$720m. It has also entered into a lock-up and support agreement with Letko Brosseau & Associates, which owns about 19 per ent of Transat’s outstanding shares and had previously opposed the deal.

The move is an attempt to fend off an unsolicited bid from Group Mach, a Quebec real-estate developer that’s offered to buy at least 6.9 million of Transat’s Class B shares for C$14 a share.

Transat’s board has approved the new Air Canada offer. Shares were indicated to open Monday as high as C$14.80, up 25 per cent from Friday’s close of C$11.79.

“We are very pleased with the added stability brought about by Air Canada’s increased bid as supported by Transat’s largest shareholder, Letko Brosseau,” Transat chief executive Jean-Marc Eustache said.

The break fee payable by Transat if the agreement is terminated was also increased to C$40m from C$15m.

Shareholders will be asked to vote on the competing offers at a special meeting on August 23.

Updated: August 12, 2019 04:27 PM

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