Could AC Buy Transat? 16May19 Update: AC enters into agreement to buy Transat
Dec 28, 2020, 9:06 pm
#556
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Jan 10, 2021, 10:04 pm
#557
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Pladeau urges Ottawa to reject Air Canada takeover of Air Transat
Quebec media baron Pierre-Karl Pladeau is urging the federal cabinet to deny Air Canadas proposed takeover of Air Transat, offering to pay more for the struggling airline to guarantee competition and fairer prices for Canadian travellers.The Globe and Mail has obtained three letters from Mr. Pladeau to Transport Minister Marc Garneau calling for a rejection of the merger, saying he will pay $6 a share or 20 per cent more than Air Canada to purchase Transat AT Inc., a Montreal-based airline and tour company.
Mr. Pladeaus offer of $223-million for Transat does not involve Quebecor Media Inc., which controls his media empire and telecom holdings, but is through his private investment firm Gestion MTRHP Inc. He said he has the backing of an unnamed major financial institution.
Jan 11, 2021, 1:06 am
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Asked about Air Canadas revised offer for Transat during a news conference Tuesday, Quebec Premier Franois Legault struck a cautious tone. The Premier, a former Air Transat executive, said the market capitalization of both companies has declined as the outlook for the air travel industry has worsened.
He characterized the possibility that a competing offer will emerge to challenge Air Canada as hypothetical. Im not aware that there is a private buyer that would be interested in buying Transat for the time being, Mr. Legault said. A serious buyer would need to materialize before Quebec weighs throwing its support behind a rival bid, he said.
The Quebec government has said previously that it would consider requests for financial backing from bidders for Transat that support its political objectives for the company namely, maintaining Transats brand, head office and as much employment as possible in Quebec.
He characterized the possibility that a competing offer will emerge to challenge Air Canada as hypothetical. Im not aware that there is a private buyer that would be interested in buying Transat for the time being, Mr. Legault said. A serious buyer would need to materialize before Quebec weighs throwing its support behind a rival bid, he said.
The Quebec government has said previously that it would consider requests for financial backing from bidders for Transat that support its political objectives for the company namely, maintaining Transats brand, head office and as much employment as possible in Quebec.
I don't think there's any serious alternative, so not sure it makes much sense for them to raise a stink.
Jan 11, 2021, 9:44 pm
#561
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Why don't you think an offer from PKP is a serious alternative? Presumably the guy isn't offering to throw around a couple of hundred million dollars of his own cash just for giggles. He's worth close to $2 billion, so his pockets are deep enough.
Last edited by The Lev; Jan 12, 2021 at 8:55 am
Jan 12, 2021, 7:49 am
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Air Canadas all-stock bid for Air Transat is worth more than Pierre-Karl Pladeaus
Mr. Pladeau has offered the Transat board $6 a share or $223-million for the company, The Globe reported on Monday, and has urged Transport Minister Marc Garneau to block the Air Canada deal as cabinet weighs final approval of the takeover that would give Air Canada control of about 60 per cent of transatlantic routes.Transat shareholders on Dec. 15 approved Air Canadas offer worth $5 a share or $180-million, or 0.2862 of an Air Canada share for each Transat share. The share component is worth about $6.45, based on Air Canadas share price on Monday.
Mr. Pladeaus cash bid for Transat AT Inc. is worth less than Air Canadas if investors opt for stock, but it will present an alternative if the Air Canada deal is rejected by the federal government or antitrust regulators in Europe, said Konark Gupta, a stock analyst with Bank of Nova Scotia.
Jan 12, 2021, 9:56 am
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Jan 12, 2021, 9:05 pm
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Transat AT board reaffirms support for takeover by Air Canada, clarifies Pladeau bid
Just came through this update:
Transat AT has reconfirmed its unanimous support for its proposed acquisition by Air Canada while issuing a clarification about a proposal from telecom owner Pierre Karl Pladeau.
Transat AT has reconfirmed its unanimous support for its proposed acquisition by Air Canada while issuing a clarification about a proposal from telecom owner Pierre Karl Pladeau.
The Montreal-based tour company says the deal with Air Canada that was overwhelmingly supported by shareholders on Dec. 15 and received court approval is in the best interests of Transat and stakeholders.
Jan 13, 2021, 3:14 pm
#566
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Remember that most of PKP's worth is tied up in shares of Quebecor, so he would be dependent on raising financing to do this deal - either borrowing money or finding other investors interested in being part of the bid with him. It seems that he doesn't have sufficient financing to do the deal, let alone ensure that TS has enough liquidity after doing the deal, rather than offering a superior alternative to shareholders.
The offer price, at $5, is well below the value of AC's offer (worth $6.58 at today's closing price). One could potentially justify a lower price from another bidder because it would reduce/eliminate the execution risk that comes with the AC deal, since there would be no competition issues, but if the deal comes with a huge execution risk of its own (financing), a lower price doesn't really make sense. (Even if the offer is at $6, it's still ~10% below AC's).
I can only speculate as to PKP's motivations for the potential transaction, but if he were truly serious about it, I would expect him to have the money raised, and also to be making a more compelling pitch to shareholders - it seems that right now his focus is on lobbying politicians (via the media) to make this deal work for him by killing the one with AC.
Jan 13, 2021, 7:39 pm
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I can only speculate as to PKP's motivations for the potential transaction, but if he were truly serious about it, I would expect him to have the money raised, and also to be making a more compelling pitch to shareholders - it seems that right now his focus is on lobbying politicians (via the media) to make this deal work for him by killing the one with AC.
Jan 20, 2021, 1:46 am
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WestJet urges Ottawa to reject Air Canadas takeover of Transat or impose conditions
G&M article:
WestJet Airlines Ltd. has urged the federal government to reject Air Canada’s takeover of Transat AT Inc. or impose conditions that would limit the combined companies’ market dominance.
The federal cabinet is expected to make a decision on the $180-million takeover in the coming days or weeks, after reviewing submissions from such parties as WestJet, Transport Canada and the Competition Bureau, which has criticized the takeover as bad for consumer choice. The European Commission is also expected to make a ruling by Feb. 9. On Feb. 15, the deal falls apart unless both companies agree to extend the date.
“For 25 years, WestJet has always stood for fair and transparent competition. For this reason we do not believe the proposed transaction should proceed unless the government imposes critical mitigation measures,” said Ed Sims, WestJet’s chief executive officer, in a statement to The Globe.
Full article: WestJet urges Ottawa to reject Air Canada’s takeover of Transat or impose conditions - The Globe and Mail
WestJet Airlines Ltd. has urged the federal government to reject Air Canada’s takeover of Transat AT Inc. or impose conditions that would limit the combined companies’ market dominance.
The federal cabinet is expected to make a decision on the $180-million takeover in the coming days or weeks, after reviewing submissions from such parties as WestJet, Transport Canada and the Competition Bureau, which has criticized the takeover as bad for consumer choice. The European Commission is also expected to make a ruling by Feb. 9. On Feb. 15, the deal falls apart unless both companies agree to extend the date.
“For 25 years, WestJet has always stood for fair and transparent competition. For this reason we do not believe the proposed transaction should proceed unless the government imposes critical mitigation measures,” said Ed Sims, WestJet’s chief executive officer, in a statement to The Globe.
Full article: WestJet urges Ottawa to reject Air Canada’s takeover of Transat or impose conditions - The Globe and Mail
Last edited by tcook052; Jan 20, 2021 at 7:05 am Reason: FT copyright rules prohibit posting articles in their entirety
Jan 20, 2021, 1:58 am
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It costs nothing but a little time to go to your key lending banks and ask them for a commitment letter to finance the putative purchase and/or put in a couple of calls to other like-minded investors (remember when Groupe Mach wanted to buy Transat?).
I'm not saying his approach is a bad one, but that it's not a serious one. Perhaps he's only interested if he can pick up TS on the cheap, say at $3 a share. But that's the attitude of someone who's poking around, hoping to catch a bargain, and might or might not make a deal depending on how things go, as opposed to someone who's serious about doing a deal.
That must be a misquote, seeing as how TS doesn't fly to LHR and even combined, the two entities combined have a tiny share of the business at AMS. Surely the WS rep must have been referring to the YTO-LON and YTO-AMS routes.
so until the current deal gets nixed, if I were PKP, I'd be doing exactly what's he's doing, plus from his point of view he would not want to close a deal too quickly - better to let them bleed while waiting to see if the deal gets the nod and position yourself to close a deal just as the world is exiting lockdown (or pull out if things get dire).
WestJet is also demanding the government require the combined airlines to give up airport slots, to help offset their market dominance. WestJet singled out London’s Heathrow, Amsterdam’s Schiphol and Toronto’s Pearson airports as hubs where Air Canada’s market grip would gain even greater power with the purchase of Transat.
Jan 20, 2021, 2:23 am
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