Transat AT, the parent of Canadian holiday specialist Air Transat, is publicly rejecting an unsolicited potential takeover bid as the company waits for regulatory approval of its sale to Air Canada.

Transat says on 12 January that contrary to media reports, an outside investor is not offering a premium on the price that had been agreed with its Montreal-based competitor, and that the new proposal lacks sufficient financial backing to keep Air Transat operational through 2021.

The airline adds that the offer by billionaire investor Pierre Karl Peladeau is merely a public relations ploy.


Source: Airbus

Air Transat rejects unsolicited bid from billionaire investor

“This offer, without demonstrated committed financing, appears designed to attempt to adversely influence the regulatory approval process by suggesting that an alternative exists, should the regulatory authorities choose to reject the arrangement between Transat and Air Canada,” says Jean-Yves Leblanc, president of the special committee of the Transat Board of Directors.

“We continue to believe that Air Canada’s proposal continues to be the best option for Transat’s future, especially in the context of the pandemic and its devastating effect on airlines,” he adds

Canadian media had reported that Peladeau made the offer to buy Transat should the current planned to tie-up with the country’s legacy carrier fall afoul of  competition authorities in Canada and Europe. According to the reports, he has allegedly requested the government of Canada to reject the acquisition, and also purportedly offered C$6 per share ($4.72), which is 20% more than the C$5 per share that Air Canada will pay.

Transat says on 12 January that this is false.

“Transat therefore sets the record straight… contrary to media reports, [the] current proposal is actually for $5.00 per share (not $6.00),” the airline writes.

Further, it is not a “superior proposal” to the Air Canada agreement, in that it “lacks binding, fully committed financing or evidence of sufficient cash on hand for the purpose of making the acquisition [and] lacks financing to support Transat’s 2021 working capital requirements of approximately $500 million”, Transat says.


On 15 December, Transat shareholders overwhelmingly approved a plan under which Transat will be sold to Air Canada at a significant discount from an earlier offer. The new agreement, which the companies reached in August, calls for Air Canada to acquire Transat for C$5 per share, or about C$190 million. Previously, Air Canada had planned to acquire Transat for C$270 million.

More than 91% of Transat’s shareholders voted in favour of the deal, which expires after 15 February 2021. A few days after the shareholder approval, the Superior Court of Quebec also green-lighted the transaction.

The acquisition, which had, prior to the coronavirus pandemic, been slated to close at the end of 2020, still requires approval by regulators in Canada and the European Union.

The air transport industry in Canada has been stricken by the global health crisis on multiple fronts. The government’s strict travel restrictions, now in their 10th month, have kept many potential customers away. A mandatory 14-day quarantine upon arrival in the country, in addition to province-specific rules, and a new testing requirement for all inbound passengers have made both domestic and international travel difficult and complicated.

In addition, the government has so far declined to offer sector-specific financial aid to support the airline industry through the pandemic. As a result, thousands of jobs have been lost and the carriers have had to repeatedly adjust their networks and capacity as the crisis drags on.