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 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.