Air Canada Ups Transat Offer Price
Air Canada has increased the purchase price for its acquisition of Canadian travel company Transat to CAD$720 million.
The airline offered CAD$13 per share in June for all outstanding stock in the travel booker, despite a higher offer of CAD$14 for around a fifth of Transat’s shares from real estate developer Group Mach.
Air Canada has now lifted its offer to CAD$18 per share in an all-cash transaction.
The improved offer is supported by Transat’s largest shareholder Letko Brosseau, who owns around 19.3 percent of the company’s shares.
“After extensive consultations with Letko Brosseau and several other large shareholders of Transat, we agreed to materially increase our price to ensure the transaction receives the necessary level of support,” Air Canada chief executive Calin Rovinescu said.
The airline's board has approved the sweetened deal, which includes an increased break fee of CAD$40 million payable by Transat in case of termination of the agreement under certain circumstances, including a higher offer from another party.
The Transat board said in a statement that the arrangement with Air Canada “is in the best interest of Transat and its stakeholders and is fair to Transat shareholders.”
The board recommended that shareholders approve the Air Canada offer.