Canadian Airlines recommends acceptance of Air Canada offer
Dec 4, 1999, 4:33 pm
#1
Original Poster
Join Date: May 1999
Location: BNE
Posts: 116
Canadian Airlines recommends acceptance of Air Canada offer
From: http://micro.newswire.ca/releases/De...7.html/87005-0
--------------------------------
CALGARY, Dec. 4 /CNW/ - Canadian Airlines Corporation announced today
that its Board of Directors has recommended acceptance of the offer of 853350
Alberta Ltd. (the ``Offeror''), a corporation owned in part by Air Canada, to
purchase all of the common shares and non-voting shares of Canadian (the
``Offer''). The Board recommends Canadian shareholders tender their shares to
the Offer prior to its expiry time, which is currently set for 5:00 p.m.
(Toronto time) on December 7, 1999.
In making its recommendation with respect to the Offer, the Board noted
the Offer remains subject to conditions which, absent waiver or satisfaction,
may result in Canadian shareholders not being able to receive the
consideration offered by the Offeror, under the Offer. However, the Board
recommends the Offer as it provides Canadian shareholders with the opportunity
to receive $2.00 in cash for each of their Canadian shares, which represents a
premium on the average closing price of Canadian shares for the three months
immediately preceding the Offer. Canadian's financial advisors have concluded
that the Offer is fair, from a financial point of view, to Canadian
shareholders. The Board has reviewed all alternatives and has concluded that
the Offer represents the best option available to shareholders.
The Board has also waived the application of Canadian's Shareholder
Rights Plan to the Offer.
``This is a momentous decision for Canadian Airlines,'' said Kevin
Benson, President & Chief Executive Officer, ``and represents the culmination
of months of very public negotiation, speculation and uncertainty. We look
forward to working with Air Canada, the Offeror, the Government of Canada and
AMR Corporation to satisfy all conditions to permit the transaction to close
as soon as possible. We believe this transaction will offer more choices to
our customers, opportunities for our employees and value for our
shareholders.''
-30-
--------------------------------
--------------------------------
CALGARY, Dec. 4 /CNW/ - Canadian Airlines Corporation announced today
that its Board of Directors has recommended acceptance of the offer of 853350
Alberta Ltd. (the ``Offeror''), a corporation owned in part by Air Canada, to
purchase all of the common shares and non-voting shares of Canadian (the
``Offer''). The Board recommends Canadian shareholders tender their shares to
the Offer prior to its expiry time, which is currently set for 5:00 p.m.
(Toronto time) on December 7, 1999.
In making its recommendation with respect to the Offer, the Board noted
the Offer remains subject to conditions which, absent waiver or satisfaction,
may result in Canadian shareholders not being able to receive the
consideration offered by the Offeror, under the Offer. However, the Board
recommends the Offer as it provides Canadian shareholders with the opportunity
to receive $2.00 in cash for each of their Canadian shares, which represents a
premium on the average closing price of Canadian shares for the three months
immediately preceding the Offer. Canadian's financial advisors have concluded
that the Offer is fair, from a financial point of view, to Canadian
shareholders. The Board has reviewed all alternatives and has concluded that
the Offer represents the best option available to shareholders.
The Board has also waived the application of Canadian's Shareholder
Rights Plan to the Offer.
``This is a momentous decision for Canadian Airlines,'' said Kevin
Benson, President & Chief Executive Officer, ``and represents the culmination
of months of very public negotiation, speculation and uncertainty. We look
forward to working with Air Canada, the Offeror, the Government of Canada and
AMR Corporation to satisfy all conditions to permit the transaction to close
as soon as possible. We believe this transaction will offer more choices to
our customers, opportunities for our employees and value for our
shareholders.''
-30-
--------------------------------
Dec 4, 1999, 7:15 pm
#2
Company Representative - Air Canada
Join Date: May 1999
Location: Canada
Posts: 24,215
It's not a good sign or good move. It simply WILL NOT work out. AC has been eyeing CP's international route for a long time...
The outcome of this will be an airline monopoly in Canada.
Regards,
Empress
The outcome of this will be an airline monopoly in Canada.
Regards,
Empress
Dec 5, 1999, 4:00 am
#3
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Now which part of "monopoly" doesn't Ottawa understand?
There has been comparisons with some countries with only one major international airline - but somehow omitting the fact that there are in fact more than one other airline permitted to fly international routes. Like England with 'only' British Airways...(what about British Midland?), or France with 'only' Air France...(what about AOM French Airlines?), Germany with 'only' Lufthansa...(what about Deutsch BA?), and Australia with 'only' Qantas..(and what about Ansett Australia?).
Other than Australia, Ottawa seemed to forget that these countries in Europe are only about the size of one of our provinces. Australia is the only other true module for comparison and the other airline is Ansett which has direct competition from Qantas.
Due to the spread of Canada, there is an urgent need to have more than one carrier. But unfortunately it is not in Ottawa's foresight to correct the problem until it is too late, or the laughing stock of the aviation world.
There has been comparisons with some countries with only one major international airline - but somehow omitting the fact that there are in fact more than one other airline permitted to fly international routes. Like England with 'only' British Airways...(what about British Midland?), or France with 'only' Air France...(what about AOM French Airlines?), Germany with 'only' Lufthansa...(what about Deutsch BA?), and Australia with 'only' Qantas..(and what about Ansett Australia?).
Other than Australia, Ottawa seemed to forget that these countries in Europe are only about the size of one of our provinces. Australia is the only other true module for comparison and the other airline is Ansett which has direct competition from Qantas.
Due to the spread of Canada, there is an urgent need to have more than one carrier. But unfortunately it is not in Ottawa's foresight to correct the problem until it is too late, or the laughing stock of the aviation world.
Dec 5, 1999, 6:57 am
#4
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My morning newspaper (Edmonton Journal) tells this sad tale on the front page in a Calgary Herald story.
I have a proposition for all you loyal Canadian Airlines flyers out there -- Empress, Kenny, Celestar, et al -- let me know today (Sunday) your feelings on the takeover if you already haven't, and the move to STAR.
I have a few hundred Cdn shares to vote tomorrow (Monday), and if there are enough die-hards out there who want to take a stand, I'll vote my shares against the takeover by not tendering them. (Purely a symbolic act, but is this not the time for "foolish jestures"?)
I'm sure most of us have been flying this carrier since the old CPAir/Kanata Club days, so this does have a major symbolic importance for us all.
In the meantime, practicalities: must call the Cdn+ desk and book those 125K F-class flights to Africa on BA before the tarrif goes up to 200K on LH for the same travel! The STAR chart does not appear to give us any great deals, but that's what the future holds for us now...
Thanks to Kevin Benson, who faught the long hard fight and kept the airline aloft through some very turbulent times: it takes more to manage a company in crisis than one that has inherited all the benefits and has no real challenges in its way. And of course to all the folks who've served us so well across the Cdn system, and made us want to keep flying with them. Hold those colours up high for the next few months!
I have a proposition for all you loyal Canadian Airlines flyers out there -- Empress, Kenny, Celestar, et al -- let me know today (Sunday) your feelings on the takeover if you already haven't, and the move to STAR.
I have a few hundred Cdn shares to vote tomorrow (Monday), and if there are enough die-hards out there who want to take a stand, I'll vote my shares against the takeover by not tendering them. (Purely a symbolic act, but is this not the time for "foolish jestures"?)
I'm sure most of us have been flying this carrier since the old CPAir/Kanata Club days, so this does have a major symbolic importance for us all.
In the meantime, practicalities: must call the Cdn+ desk and book those 125K F-class flights to Africa on BA before the tarrif goes up to 200K on LH for the same travel! The STAR chart does not appear to give us any great deals, but that's what the future holds for us now...
Thanks to Kevin Benson, who faught the long hard fight and kept the airline aloft through some very turbulent times: it takes more to manage a company in crisis than one that has inherited all the benefits and has no real challenges in its way. And of course to all the folks who've served us so well across the Cdn system, and made us want to keep flying with them. Hold those colours up high for the next few months!
Dec 5, 1999, 4:11 pm
#5
Join Date: Oct 1999
Location: New York
Posts: 7,341
I feel very sad that CP will not be with us soon. I am a big fan of AC, but I believe in competitions. Having only one airline in Canada will certainly lower the service standard of AC and will lead to higher transborder and domestic air fares. People will be laid off, and a good airline will be gone...
Canadian Pacific or CP Air's Orange DC-10s perhaps started my love for airline and inflight catering... I am also mad at the fact that the oneworld carriers are not helping CP out. AA can't afford to lose CP because CP connents AA to Canada and transborder market. It will be interesting to see what will happen in the next few weeks...
Carfield
Canadian Pacific or CP Air's Orange DC-10s perhaps started my love for airline and inflight catering... I am also mad at the fact that the oneworld carriers are not helping CP out. AA can't afford to lose CP because CP connents AA to Canada and transborder market. It will be interesting to see what will happen in the next few weeks...
Carfield
Dec 5, 1999, 4:37 pm
#6
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Location: Hong Kong
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Posts: 329
I am so sad to hear this either, I love the combinations of airline in 1w rather than in Stars. I still remember the flight that I first came to Canada on CP's biz class 7 years ago. Though it wasn't as good as today's standard, it was so unforgettable, and made me fully relaxed before facing a new life in here. Though I will leave Canada soon, my EP membership will still be valid at least until Feb 01 or even Feb 02,where I can take advantages when travelling on other 1w members. But now........ what a bad news for me.
Dec 5, 1999, 7:59 pm
#7
Company Representative - Air Canada
Join Date: May 1999
Location: Canada
Posts: 24,215
THIS IS FOR ALL THE SHAREHOLDERS OUT THERE DECIDING WHETHER TO TENDER THEIR SHARES:
This is sort of a plead to not to tender your shares to Air Canada:
Think carefully about what an airline monopoly will mean.
*There will be less flights, more passenger, less award seats, more elites, less/no upgrades. What good is a FF program if there are less award seats and less or even no upgrades seats. Take UA for example, upgrades are even hard to come by for 1K members.
*Decline in service will be a definite although they keep insisting that it's not going to happen. The airline knows that we are ADDICTED to FF programs. They know that we will not switch airlines not like now they will afraid that we might switch from AC to CP or vice versa.
*Value of elite membership will also decline becuase there will be a LOT LOT more elite at each levels making each benefits decline in value. Upgrades are already hard to come by on some days now. Double the number of passenger fighting for it.
*Job loss is a definite although they keep saying it won't.
*I remember there was an article in the Toronto Star taking Mexico as an example when their two airlines merged into one and it ended up didn't work out. I'll try to find a link to that.
*In conclusion, AC is trying to take this opportunity to grab CP's international routes. Think of all the money AC could make if they get to fly to HKG daily instead of just 3/4 times a week. Think of flying the usually full YVR-BJE route. They are not trying to help CP, they are trying to take advantage of CP's current situation.
There are a LOT LOT more reason why this shouldn't happen.
SO, PLEASE LET CP AND AC STAY AS TWO SEPERATE AIRLINES. We as a customer will be the victim of an airline monopoly while the new AC will sit and watch and make more money.
Maybe for those who are in favour of this, tell us some of the reason why they should merge. If you are saying that if AC don't merge with CP, they will no longer exist, they will go bankrupt. We all know it's not true...we all know that OneWorld is waiting til the last minute to see what happens before doing anything.
Best Regards,
Empress
This is sort of a plead to not to tender your shares to Air Canada:
Think carefully about what an airline monopoly will mean.
*There will be less flights, more passenger, less award seats, more elites, less/no upgrades. What good is a FF program if there are less award seats and less or even no upgrades seats. Take UA for example, upgrades are even hard to come by for 1K members.
*Decline in service will be a definite although they keep insisting that it's not going to happen. The airline knows that we are ADDICTED to FF programs. They know that we will not switch airlines not like now they will afraid that we might switch from AC to CP or vice versa.
*Value of elite membership will also decline becuase there will be a LOT LOT more elite at each levels making each benefits decline in value. Upgrades are already hard to come by on some days now. Double the number of passenger fighting for it.
*Job loss is a definite although they keep saying it won't.
*I remember there was an article in the Toronto Star taking Mexico as an example when their two airlines merged into one and it ended up didn't work out. I'll try to find a link to that.
*In conclusion, AC is trying to take this opportunity to grab CP's international routes. Think of all the money AC could make if they get to fly to HKG daily instead of just 3/4 times a week. Think of flying the usually full YVR-BJE route. They are not trying to help CP, they are trying to take advantage of CP's current situation.
There are a LOT LOT more reason why this shouldn't happen.
SO, PLEASE LET CP AND AC STAY AS TWO SEPERATE AIRLINES. We as a customer will be the victim of an airline monopoly while the new AC will sit and watch and make more money.
Maybe for those who are in favour of this, tell us some of the reason why they should merge. If you are saying that if AC don't merge with CP, they will no longer exist, they will go bankrupt. We all know it's not true...we all know that OneWorld is waiting til the last minute to see what happens before doing anything.
Best Regards,
Empress
Dec 5, 1999, 8:26 pm
#8
Join Date: Aug 1999
Location: Vancouver, BC, CANADA
Programs: AC SE, SPG P
Posts: 759
Empress, I thought that you were switching to AC!?
With a merged airline, aircraft will be better used. Sure, there will be less seats available for the FF. I do not think that AA will let the sale proceed. Although they are pumping money into CP, I believe that they are getting more from it than they are giving. It's a business, not a charity. Access to the Asian routes is very, very valuable to CP. Maybe this was a move orchestrated by CP to get the public to think and complain about the situation and to get AA to come to the rescue!
I was once a solid supporter of AC, not anymore. Over the past 8 or 10 years, I switched to CP and have never looked back.
With a merged airline, aircraft will be better used. Sure, there will be less seats available for the FF. I do not think that AA will let the sale proceed. Although they are pumping money into CP, I believe that they are getting more from it than they are giving. It's a business, not a charity. Access to the Asian routes is very, very valuable to CP. Maybe this was a move orchestrated by CP to get the public to think and complain about the situation and to get AA to come to the rescue!
I was once a solid supporter of AC, not anymore. Over the past 8 or 10 years, I switched to CP and have never looked back.
Dec 5, 1999, 9:12 pm
#9
Company Representative - Air Canada
Join Date: May 1999
Location: Canada
Posts: 24,215
I am not switching to AC...I was exploring that possibility only because I was getting increasing frustrating with upgrades on CP and AC offers SE member upgrades at the time of booking. I never had a problem with CP's service. However, if they do go ahead with the merging, it might not be a bad idea to be comped before hand.
However, if AC and CP do become one, getting an upgrade will probably mean hitting a lottery.
I think AA probably have told CP that they are not going to help them this time. That's why CP is recommending the acceptance of AC's plan. It's not like CP and AC are the best of friends. Once more than 50% of the shareholders tender their shares to AC on Tuesday, it'll probably be too late for any help.
However, I believe employees owns 30% of the shares, AMR 30%. And I am sure that the employees are in favour of this because they'll do anything to keep their jobs, AA and the rest of the shareholders are the only one who can stop this.
Are the shareholders listening? (Shareholder?) A lot of us out here are very much AGAINST this.
Regards,
Empress
[This message has been edited by Empress (edited 12-05-1999).]
However, if AC and CP do become one, getting an upgrade will probably mean hitting a lottery.
I think AA probably have told CP that they are not going to help them this time. That's why CP is recommending the acceptance of AC's plan. It's not like CP and AC are the best of friends. Once more than 50% of the shareholders tender their shares to AC on Tuesday, it'll probably be too late for any help.
However, I believe employees owns 30% of the shares, AMR 30%. And I am sure that the employees are in favour of this because they'll do anything to keep their jobs, AA and the rest of the shareholders are the only one who can stop this.
Are the shareholders listening? (Shareholder?) A lot of us out here are very much AGAINST this.
Regards,
Empress
[This message has been edited by Empress (edited 12-05-1999).]
Dec 6, 1999, 3:04 am
#10
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I'd say - REJECT THE OFFER.
Canada needs two airlines. Simple.
For most of us here who travel a lot, and probably on company expense when we are not footing the bill, think of the other folks who save and save just for that $599 deal to fly between Toronto and Vancouver. What will happen when it goes up to $899 - takeit or leave it-?
Fares to international destinations will basically remain competitive thanks to foreign carriers serving the routes, but airfares within Canada and across provincial communities will suffer the most!
Forget about our upgrades and elite stauts for a while. Think that your relatives maynot be able to visit as much or as often (okay to some of us, that may be a good thing), think of the kids whose parents simply cannot afford to fly them to the Rockies for their summer vacations.
Think of disgrunted , bitter, old, flight attendants who don't give a **** whether you had your special meal or not. After all, you really DON'T have a choice.
Remember the old saying "We'd keep the two airlines seperate" quote from CP after taking over Wardair.
Think! Again.
Canada needs two airlines. Simple.
For most of us here who travel a lot, and probably on company expense when we are not footing the bill, think of the other folks who save and save just for that $599 deal to fly between Toronto and Vancouver. What will happen when it goes up to $899 - takeit or leave it-?
Fares to international destinations will basically remain competitive thanks to foreign carriers serving the routes, but airfares within Canada and across provincial communities will suffer the most!
Forget about our upgrades and elite stauts for a while. Think that your relatives maynot be able to visit as much or as often (okay to some of us, that may be a good thing), think of the kids whose parents simply cannot afford to fly them to the Rockies for their summer vacations.
Think of disgrunted , bitter, old, flight attendants who don't give a **** whether you had your special meal or not. After all, you really DON'T have a choice.
Remember the old saying "We'd keep the two airlines seperate" quote from CP after taking over Wardair.
Think! Again.
Dec 6, 1999, 8:27 am
#11
A FlyerTalk Posting Legend
Join Date: May 1999
Posts: 46,817
Well, just some more fuel for the fire as the Minister of Transport, David Collenette, on his way to the international "Beyond Open Skies" conference in Chicago today made remarks in strong support of the merger deal noting that Canadians would have a more stable industry with a robust national flag carrier capable of competing with the best in the world!
Dec 6, 1999, 12:39 pm
#12
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Seems as if a lot of you out there dcon't like what is about to happen, and to an extent I agree. Realistically, however, we have come to the end of the road and our journeys will never be same after all this works its way through. I think we've been fortunate to have the highest levels of in-flight service on our two carriers (though I have had my share of problems with Air Canada's often arrogant and less attentive flight attendants).
I will be withholding my shares for the time being, so if the vote is as close as the last Quebec referendum, my meagre shareholding will have had some impact as a protest on behalf of all of you out there.
In the meantime, let's continue to enjoy the benefits of being elites on Cdn. Just got my upgrade on Thursday's flight to YYZ confirmed, which may not be in the cards once Cdn+ gets merged into Aeroplan.
I will be withholding my shares for the time being, so if the vote is as close as the last Quebec referendum, my meagre shareholding will have had some impact as a protest on behalf of all of you out there.
In the meantime, let's continue to enjoy the benefits of being elites on Cdn. Just got my upgrade on Thursday's flight to YYZ confirmed, which may not be in the cards once Cdn+ gets merged into Aeroplan.
Dec 6, 1999, 5:31 pm
#13
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Actually I have a funny feeling that Canadian Plus members' might be transferred over to American Airlines' AAdvantage programme! That way, we get to stay with OneWorld. - Besides, Canadian Plus' database is hosted on SABRE anyway!
Dec 7, 1999, 12:41 am
#14
Company Representative - Air Canada
Join Date: May 1999
Location: Canada
Posts: 24,215
When can we expect to know whether they have 50% of the shares?
Btw, on today's YVR-YYZ flight, both FAs and the pilots seems very upbeat.
Regards,
Empress
Btw, on today's YVR-YYZ flight, both FAs and the pilots seems very upbeat.
Regards,
Empress
Dec 7, 1999, 4:37 pm
#15
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The hour has come and gone (3 pm Calgary time), and following the advice of all of you out there, my Cdn shares remain in my account, untendered to AC. I suppose we should know tomorrow morning if 50% have been tendered, and if AA's block is among them, then it might even be 90%. (And I'd feel a bit like Davey Crockett at the Alamo!) Even though I did tender my AC stock last month, they've only taken up one-third of them, so I still own a bit of the "winner". Oh, yes, and my Onex stock -- bought long before this whole thing started -- has been soaring since the deal collapsed! Latest news is that AMR and AC negotiations are going well, so...stand by.