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Air Canada sweetens Transat offer
Posted on Monday, 12 August 2019 11:05
Air Canada has upped its all-cash offer for Transat AT to CAD 720.00 million (USD 544.46 million) while securing a lock-up and support agreement for the 19.3 per cent held by the integrated international tourism company’s largest shareholder. The Canadian flag carrier has increased its price from CAD 13.00 apiece to CAD 18.00 and its break fee from CAD 15.00 million to CAD 40.00 million "We are very pleased by the added stability brought about by Air Canada's increased bid as supported by Transat's largest shareholder, Letko Brosseau,” president and chief executive Jean-Marc Eustache noted. He added: “This fully funded cash transaction is the ideal platform for Transat's continued presence and growth in Montreal.” Transat’s board of directors and its special committee have unanimously reiterated that the arrangement with Air Canada is in the company’s best interest and, as such, has recommended the sweetened proposal. It also reiterates that shareholders should reject the “highly abusive, coercive, misleading and conditional scheme” tabled by Groupe Mach, Air Canada is the country’s largest domestic and international carrier and among the 20 largest in the world. The airline serves nearly 220 airports on six continents, including hubs in Australia, the Caribbean and Mexico and served nearly 51.00 million customers in 2018. As an integrated international tourism company specialising in holiday travel, Transat provides vacation packages, hotel stays and air transportation under its Air Transat and Transat brands to 60 destinations in over 25 countries. In the first six months ended 30th April 2019, the group booked revenue of CAD 1.54 billion (H1 2018: CAD 1.52 billion). Transact incurred an adjusted operating loss of CAD 34.68 million in H1 2019 (H1 2018: CAD 16.63 million loss) and had total debt of CAD 703.16 million, as at 30th April 2019. Zephyr, the M&A database published by Bureau van Dijk, shows 78 acquisitions of travel agencies and tour operators have been announced globally so far this calendar year. The Transat offer is the largest of 2019 to date, followed by the purchase of a 78.6 per cent stake in Thomas Cook for USD 939.61 million. © Zephus Ltd