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Brad MacKay

WJ AT

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Le transporteur de Calgary WestJet devrait acquérir le voyagiste intégré Transat A.T. affirme sans détour Turan Quettawala, de Banque Scotia.

 

«Notre analyse suggère qu’une transaction serait bénéfique tant sur le plan stratégique que financier et qu'elle apporterait de nombreuses synergies et des avantages concurrentiels sur les marchés internationaux», écrit l’analyste dans un rapport.

 

WestJet pourrait offrir une plus-value aussi élevée que de 90% pour mettre la main sur les actions de Transat et encore y trouver son compte, avance-t-il.

 

WestJet pourrait offrir jusqu'à 10$ par action (une plus-value de 45 à 90%) pour Transat et ajouter de 25 à 30% à ses propres bénéfices, calcule M. Quettawala.

 

Le rapport daté du 13 février trouve peu d’écho en Bourse pour l’instant. L’action de WestJet(Tor., WJA,22,48$) est stable mardi matin, tandis que celle de Transat(Tor., TRZ,5,18$) gagne 5,5%.

 

«L'action de Transat a touché un creux en 52 semaines lundi. Elle se trouve au même cours qu'en 1992 et se situe bien loin du sommet de 35,75$ touché en septembre 2007.»

 


« L'action de Transat se trouve au même cours qu'en 1992 »

 

 

d60c1ca3a7d518a26524af3820648589.jpg

L'évolution de l'action Transat sur dix ans.

 

 

Difficile de dire si les dirigeants de WestJet voudraient considérer une telle transaction, admet l’analyste. Par contre, les actionnaires de Transat seraient sûrement ouverts à une telle possibilité après des années sans rendement en Bourse pour le voyagiste.

 

Avec l’expansion de WestJet à Montréal et Québec et les difficultés rencontrées par Transat ces dernières années, cette spéculation n’est pas nouvelle. Divers analystes y font allusion à l’occasion depuis 2014.

 

En mars 2014, Doug Cooper, de Beacon Securities, voyait dans Transat une belle cible pour WestJet ou Air Canada. Il faisait miroiter les avantages d’une consolidation pour la rentabilité de l’industrie.

 

Selon M. Quettawala, WestJet pourrait percer le marché européen plus rapidement et à moindre coût et obtiendrait potentiellement un meilleur pouvoir d’imposer ses prix pour les vols transatlantiques et vers le Sud. La société pourrait ainsi mieux rivaliser Air Canada et Rouge.

 

L’analyste en rajoute en affirmant que les mérites de placement de WestJet s’amélioreraient du fait que l’acquisition réduirait les coûts et le risque de son expansion à l’étranger.

 

WestJet pourrait densifier son service à l’international à moindre coût que par l’expansion interne de sa propre flotte d’appareils. Le transporteur bénéficierait d’un réseau déjà établi en Europe notamment.

 

Les vols transatlantiques de Transat ne sont pas aussi rentables que WestJet le voudraient, mais les mauvais rendements de Transat tiennent au fait qu'elle concurrence des transporteurs qui offrent des vols réguliers. WestJet pourrait remédiier à ce désavantage.

 

WestJet obtiendrait aussi une part de marché instantanée de 20% sur les vols transatlantiques et de 23% pour les vols vers le Sud tout en éliminant un concurrent.

 

Ensemble, les deux transporteurs auraient 45% du marché du Sud pendant l'hiver et 25% de celui des vols transatlantiques pendant l'été.

 

«Bien que le maillage des deux cultures d’entreprise comporte un risque, il pourrait aussi se transformer en avantage avec l’ajout de plus de salariés bilingues aux divers postes de service à la clientèle», fait valoir l’analyste.

 

WestJet mettrait la main sur un voyagiste disposant de liquidités excédentaires de 150 millions de dollars, sans avoir à émettre de titres de dettes ou des actions.

 

La flotte louée d’Airbus330 et de Boeing737 de Transat ne serait pas un obstacle puisque WestJet pourrait utiliser les appareils Boeing pour certaines de ses destinations, revendre certains Airbus 310 ou envisager l’ajout des appareils A330neo à sa propre flotte, éventuellement.

 

"WestJet obtiendrait 14 Airbus330 et leur baux annuels de 70M$ par année pour 300M$ alors qu'il lui en coûterait 3,5G$US pour acheter des appareils neufs ou 800M$US pour acheter des appareils usagés", précise l'analyse.  

 

Transat possède aussi des hôtels au Mexique et dans les Caraïbes d’une valeur de 150M$ que WestJet pourrait revendre, croit aussi l'analyste.

 

Les économies administratives, d’exploitation et d’entretien pourraient atteindre 10% de la valeur de la transaction, estime aussi M. Quettawala.

 

Cette analyse exclut la valeur d’autres actifs tels que les droits d’atterrissage à l’étranger, le potentiel d’une meilleure la gestion des revenus ou encore la valeur intangible de la marque Transat au Québec.

 

M. Quettawala termine son analyse en affirmant que les mérites d’une telle union sont suffisants pour contrebalancer les risques potentiels qui y sont associés, nommément le fait que les employés de Transat sont syndiqués.

 

La transaction pourrait aussi soulever l’opposition du gouvernement du Québec, en particulier si l’offre de WestJet était hostile.

http://www.lesaffaires.com/bourse/analyses-de-titres/westjet-devrait-acquerir-transat-selon-banque-scotia/593344

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Translation might be a little rough, but FWIW:

NThe Calgary WestJet carrier is expected to acquire the integrated tour operator Transat A.T., says Turan Quettawala of Scotiabank.
Our analysis suggests that a transaction would be beneficial both strategically and financially and would bring many synergies and competitive advantages to international markets, "the analyst wrote in a report.
WestJet could offer as much value as 90% to get hold of Transat's shares and still find its account, he said.
WestJet could offer up to $ 10 per share (a 45% to 90% capital gain) for Transat and add 25-30% to its own profits, Quettawala said.
The report dated February 13 is not very popular on the stock market at this time. WestJet's share (Tor., WJA, $ 22.48) is stable Tuesday morning, while that of Transat (Tor., TRZ, $ 5.18) is up 5.5%.
"Transat's share hit a low in 52 weeks Monday. It is at the same level as in 1992 and is well below the peak of $ 35.75 in September 2007. "

"Transat's share is at the same level as in 1992"
The evolution of the Transat share over 10 years.
It's hard to say whether WestJet executives would want to consider such a deal, the analyst admits. On the other hand, the shareholders of Transat would surely be open to such a possibility after years without return on the stock market for the tour operator.
With the expansion of WestJet in Montreal and Quebec City and the difficulties encountered by Transat in recent years, this speculation is not new. Various analysts have alluded to the occasion since 2014.
In March 2014, Doug Cooper of Beacon Securities saw Transat as a good target for WestJet or Air Canada. He was lapping the benefits of consolidation for the profitability of the industry.
According to Mr. Quettawala, WestJet could penetrate the European market faster and at lower cost and potentially gain greater power to impose its prices for transatlantic flights and to the south. The company could better compete with Air Canada and Rouge.
The analyst adds that WestJet's investment merits would improve as the acquisition would reduce costs and the risk of its expansion abroad.
WestJet could expand its service internationally at lower cost than through the internal expansion of its own fleet of aircraft. The carrier would benefit from a network already established in Europe in particular.
Transatlantic Transatlantic flights are not as profitable as WestJet would like, but Transat's poor performance is due to competition from carriers offering scheduled flights. WestJet could remedy this disadvantage.
WestJet would also get an instant market share of 20% on transatlantic flights and 23% on flights to the South while eliminating a competitor.

Together, both carriers would account for 45% of the Southern market during the winter and 25% of that for transatlantic flights during the summer.
"Although there is a risk in linking the two corporate cultures, it could also turn into an advantage with the addition of more bilingual employees to the various customer service positions," the analyst said.
WestJet would get hold of a $ 150 million excess liquidity operator without issuing debt securities or shares.
The leased fleet of Airbus330 and Boeing737 from Transat would not be an obstacle since WestJet could use Boeing aircraft for some of its destinations, resell some Airbus 310 aircraft, or consider the addition of A330neo aircraft to its own fleet.
"WestJet would get 14 Airbus330s and their annual leases of $ 70M per year for $ 300M, while it would cost US $ 3.5B to buy new aircraft or US $ 800M to buy used devices," the analysis said.
Transat also has hotels in Mexico and the Caribbean valued at $ 150 million that WestJet could sell, the analyst said.
Administrative, operating and maintenance savings could reach 10% of the value of the transaction, Quettawala said.
This analysis excludes the value of other assets such as landing rights abroad, the potential for better revenue management, and the intangible value of the Transat brand in Québec.
Mr. Quettawala concluded his analysis by saying that the merits of such a union are sufficient to offset the potential risks associated with it, namely, the fact that Transat employees are unionized.
The transaction could also raise opposition from the Quebec government, particularly if WestJet's offer was hostile.

 

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Given that Westjet already has a packaged vacation business, the acquisition of Transat AT would not be illogical. The addition of a significant wide body fleet and North Atlantic route authorities would move WJ ahead by many years in global expansion vs organic growth in these same markets. It also brings a greater operational experience level in that realm.

Yes, WJ would have to digest a significant group of tenured unionized employees, but the reality is that WJ is headed for unionization anyway with or without a merger. It also provides WJ with a turn key French language workforce.

This transaction may not be on the WJ radar screen but on paper it looks like a winner.

 

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Air Canada started up Rouge to recover the leisure market so it appears to have been successful project. Out of the last three holidays south, we've used TransAt only once and ACrouge twice. The TransAt service was good but when planning trips in the following years their departure times and frequency of flights departing YYZ were not a consideration. 

Regarding a possible merger of employee groups, the pilots at AT are ALPA with dates of hire back to 1986. 

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Perhaps explains the TRZ stock price this week. Seems the speculators are giving this at least a thought. Most impressive Canadian carrier this week (at least for the time being).

 

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AT's A330 fleet is no prize and I doubt the 737s are leased on terms WS would find attractive.

I would put the bulk of the value for WS in the Francophone abiet unionized workforce. 

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