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moeman

Someone is interested in Transat

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This CBC article is suggesting the interested party might be AC. I don’t know if the MAX delay will continue but this scenario makes the most sense to me with Airbus aircraft that would blend easily into their operations as well as the Transat hotel operations. I would think Transat already has sold seats for their own summer program but that can all be adjusted. Also a TS purchase would bring group of fully trained flight/cabin crew and maintenance staff which are all running in short supply. Quite a strategic manoeuvre which would certainly help them remain the dominate player in the leisure market. 

https://www.cbc.ca/news/business/air-transat-sale-possibilities-1.5118046

AA515748-3A32-430B-AA17-CF9E6E6F1DB1.jpeg

Edited by blues deville

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Is anyone here (hello Dagger!) informed enough to speculate on how the competition bureau or other regulatory bodies would view a takeover of TS by AC should it turn out that AC is interested?

An AC-TS amalgamation would be a really interesting, if messy for a while, scenario.  I'd be fascinated to see what plans Calin and his team had for whether TS would be folded into Rouge, or partly each to mainline and Rouge, or if some other structure would be devised.  AC, I guess due to differences in the Canadian vs marketplaces, is already a very different entity from the other N American carriers, but would likely become more different still.

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Let's keep in mind that any potential suitor is interested in the tour operator side of the business. That's the part that's supposed to generate a profit. For tour operators like Transat AT and Sunwing, the airline is a cost centre. IMHO, if said suitor already owns an airline, there would be even less incentive to take on a separate operation and all of the complexities that would entail.

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1 hour ago, J.O. said:

Let's keep in mind that any potential suitor is interested in the tour operator side of the business. That's the part that's supposed to generate a profit. For tour operators like Transat AT and Sunwing, the airline is a cost centre. IMHO, if said suitor already owns an airline, there would be even less incentive to take on a separate operation and all of the complexities that would entail.

Perhaps a joint bid with someone like TUI...

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Since we’re all taking a guess and speculating, I will say Chorus aviation and they will lease the aircraft to Air Canada.

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It was suggested last week by LaPresse that Westjet made an unsolicited offer, Air Canada was asked to counter and did, and there might be other bidders like Sunwing/TUI. 

Beyond that I have heard nothing, and have no idea how the Competition Bureau would react. Transit got its first leased A321LR last week and is on the hook for a lot of new metal. Obviously, the Airbus aircraft are a better fit with AC/Rouge than with WS or any other Canadian operator, but you can undo those transactions since the airframe companies have huge order books. We might see a more complex transaction with multiple parties involved taking pieces of the carrier.

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AC may be looking for new metal anyway to replace the MAX.  Not the right sized replacement but seats are seats and AC needs em now.

 

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Transat is AC's largest competitor on the Atlantic, I suspect they are concerned "whose hands" the Airline lands in.

Edited by Johnny

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1 hour ago, Johnny said:

Transat is AC's largest competitor on the Atlantic, I suspect they are concerned "who's hands" the Airline lands in.

There, they're, their...don't get angry but it should be "Whose hands"........4317.gif

Edited by Kip Powick

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It would be funny if they wound up like British Caledonian who was bought by British Airways just to expedite getting the A320.

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My sources are saying the interested TS parties are two wealthy Quebec businessmen. No previous airline experience. 

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https://globalnews.ca/news/5258944/i-will-continue-to-fight-for-quebec-companies-to-stay-here-quebecor-mulls-transat-acquisition/

 

‘I will continue to fight for Quebec companies to stay here’: Quebecor mulls Transat acquisition

By Christopher Reynolds The Canadian Press
 
 
 
 
 
Quebecor president and CEO Pierre Karl Peladeau addresses the media company's annual meeting as the chairman of the board Brian Mulroney looks on in Montreal on Thursday, May 9, 2019.

Quebecor president and CEO Pierre Karl Peladeau addresses the media company's annual meeting as the chairman of the board Brian Mulroney looks on in Montreal on Thursday, May 9, 2019.

Paul Chiasson/The Canadian Press

 

The head of Quebecor Inc. says he is exploring a possible acquisition of Montreal-based tour operator Transat A.T., but another prospective buyer is already a step ahead.

Chief executive Pierre Karl Péladeau said Thursday he has commissioned a financial analysis by an investment firm.

“I believe it’s a very good brand. I think Quebecers like Transat,” he said Thursday after Quebecor’s annual shareholder meeting.

“I will continue to fight for Quebec companies to stay here. I think that that could be an interesting…opportunity.”

READ MORE: Pierre Karl Péladeau to buy Taxelco, including insolvent electric taxi company

Peladeau, the controlling shareholder of Quebecor and son of its deceased founder, said he personally ordered the analysis — not his company — but “it’s premature to close any sorts of doors.”

Peladeau is not the only interested party. Montreal developer Vincent Chiara, who owns Groupe Mach, which bought the former CBC tower in Montreal in 2017, told The Canadian Press he has already submitted an offer following several months of talks.

“We had the idea of building a portfolio in the hospitality industry and they had a platform and projects in their plans to build exactly that,” said Chiara, referring to Transat’s $750-million plan to develop a hotel chain in Mexico’s Riviera Maya and the Caribbean.

He said Transat’s fleet of about 40 planes is particularly appealing.

“They have the means to move the passengers who go to the destination…They have an important capacity to fill rooms and with this capacity there, we eliminate a lot of risks for hotel development.”

“Of course, we want to privatize. Our proposal is to buy out all the shareholders,” he added.

READ MORE: Péladeau family squares off in court over Quebecor shares

Transat confirmed last week it had spoken with several parties about a possible sale of the company.

Péladeau continued to rail against Bell TV in the latest round of a spat between the two media giants, calling its actions “completely abhorrent” at the Quebecor AGM.

In April, Péladeau temporarily suspended TVA Sports’ signal for Bell subscribers until a judge ordered the return of the service. Quebecor has criticized Bell for not paying it royalties that reflect the fair value of its specialty channels, especially TVA Sports, which is suffering because the Montreal Canadiens missed the playoffs for a second consecutive year.

The hockey team’s losing record has hit advertising sales, raising questions about the viability of the specialty channel, which was launched in 2011 and has lost more than $150 million in six years.

“Maybe we were a little bit naive regarding this,” Péladeau said. “We have been patient. But…there is always an end to patience.”

“It’s wearing thin,” added chairman and former prime minister Brian Mulroney.

READ MORE: Judge orders Quebecor to stop scrambling TVA Sports signal for Bell TV subscribers

Quebecor more than doubled its dividend as it reported its first-quarter profit rose compared with a year ago.

The media and telecommunications company said Thursday it will now pay a quarterly dividend of 11.25 cents per share, up from 5.5 cents.

The increased payment to shareholders came as Quebecor says it earned $189.0 million or 74 cents per share in the first quarter of 2019, up from $57.1 million or 24 cents per share a year earlier.

Revenue totalled nearly $1.03 billion for the quarter ended March 31, compared with $1.00 billion in the first quarter of 2018.

On an adjusted basis, the Montreal-based company said it earned 44 cents per share from continuing activities compared with 38 cents per share a year ago.

Analysts on average had expected a profit of 44 cents per share and revenue of $1.03 billion, according to Thomson Reuters Eikon.

_ With files from Julien Arsenault

 

© 2019 The Canadian Press

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On 4/30/2019 at 1:50 PM, moeman said:

https://www.cbc.ca/news/business/air-transat-sale-1.5116543

 

Air Transat shares soar 43% after airline says sale of company is possible

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Company that owns Air Transat says more than 1 party likely to make bids

The Canadian Press · Posted: Apr 30, 2019 10:24 AM ET | Last Updated: 2 minutes ago
 
air-transat-boeing-737.jpeg
Transat AT says it is in talks with more than one party for possible sale. (Submitted by Matt Lino)

Shares of Transat AT Inc. soared more than 40 per cent Tuesday after the tour and travel company announced preliminary talks regarding the possible sale of the company.

On the Toronto Stock Exchange, shares of the parent company of Air Transat, gained more than 43 per cent, or $2.44, at $8.11 in midday trading. Shares reached a high of $8.85, which was still short of its 52-week high.

The Montreal-based company said before its annual meeting that it is in talks with more than one party regarding a potential transaction following expressions of interest it received.

Transat said it has formed a special committee of independent directors to evaluate the proposals with the assistance of financial and legal advisers.

"I want to reiterate that the discussions are at a preliminary stage and no decision has been made on a potential transaction," Transat AT chief executive Jean-Marc Eustache told shareholders at the beginning of the meeting.

Turnaround plan

The company has embarked on a financial turnaround and plans to build a network of hotels on sun destination beaches in the hope that this will better position it in the face of increased competition from Canadian rivals such as Air Canada Rouge, WestJet Vacations and Sunwing Airlines.

Transat did not name the potential bidders, but analyst Benoit Poirier of Desjardins Capital Markets said they could be the same groups that have expressed interest in Thomas Cook.

While the stock price has surged, Poirier says it was still well below Transat's "intrinsic value" which he has conservatively pegged at $12 per share based on surplus cash, value of land and earnings.

Transat shares were changing hands at $8.13 in the afternoon on Tuesday, up $2.46 from Monday's level.

Premier weighs in

Quebec Premier François Legault co-founded Air Transat in 1986 and was CEO of the company before entering politics. He told the CBC the potential sale was a "shock for me."

"I'm thinking about the employees," he said. "For me it's important to do everything we can to keep the headquarters in Quebec." He said he no longer has shares but because of his personal connection Economy Minister Pierre Fitzgibbon will be handling the file.

Air Transat was founded 33 years ago by a group of businessmen, including Eustache and Legault, who left the company in 1997 before making the leap into politics.

The main shareholder of the tour operator — which has some 5,000 employees — is Letko, Brosseau and Associates with a stake of 18.14 per cent and the Quebec Federation of Labour's Solidarity Fund with 11.58 per cent.

A request for comment by Letko from CBC News was not immediately returned on Tuesday.

Quebec's pension plan, the Caisse de depot et placement du Quebec, is the fourth largest owner of the company, with 5.84 per cent interest.

Transat offers vacation packages, hotel stays and air travel under the Transat and Air Transat brands.

couldbeonex

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It has been reported WJ was the one that made the initial unsolicited offer to buy Transat.  I'm thinking that offer was actually onex's plan via WJ.

Onex clearly made their offer to WJ awhile ago.  The amount of due diligence required for the BOD to recommend acceptance indicates this.

One would think the two offers must be related if they are being pursued in tandem.

Onex usually partners with some one.  I think another shoe is going to drop.  WJ, Transat,.....

A oneworld or Skyteam member?  

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35 minutes ago, Turbofan said:

It has been reported WJ was the one that made the initial unsolicited offer to buy Transat.  I'm thinking that offer was actually onex's plan via WJ.

Onex clearly made their offer to WJ awhile ago.  The amount of due diligence required for the BOD to recommend acceptance indicates this.

One would think the two offers must be related if they are being pursued in tandem.

Onex usually partners with some one.  I think another shoe is going to drop.  WJ, Transat,.....

A oneworld or Skyteam member?  

I think the share offering of $31 speaks volumes, how could any BOD not recommend based on that alone ????

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4 hours ago, AIP said:

I think the share offering of $31 speaks volumes, how could any BOD not recommend based on that alone ????

True.  I was thinking about an article that said the WJ BOD already had opinions from various firms.  That takes time.

Time means the WJ offer to Transat happened with  understanding of the Onex offer to WJ.

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Hot off the press this morning...

https://www.bnnbloomberg.ca/air-canada-in-talks-to-buy-transat-in-520-million-deal-1.1259827

 

Air Canada is in exclusive talks to buy Transat AT Inc. in a deal that would value the travel company at about $520 million, Transat said Thursday.

Canada’s largest air carrier is proposing to acquire Transat for $13 per share.

"This announcement is good news for Transat," said Transat President and CEO Jean-Marc Eustache, in a release. "This represents the best prospect for not only maintaining, but growing over the long term the business and jobs that Transat has been developing in Quebec and elsewhere for more than 30 years."

Transat said its operations will continue as normal, and that there will be no change for travellers.

The news comes two weeks after Transat said it was in talks with multiple parties about a possible takeover.

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Further to above...

https://web.tmxmoney.com/article.php?newsid=7299043838862650&qm_symbol=TRZ

MONTREAL, May 16, 2019

MONTREAL, May 16, 2019 /CNW Telbec/ - Transat AT Inc. ("Transat") announces that it has agreed to a 30-day period of exclusive negotiations with Air Canada pursuant to a letter of intent contemplating a transaction by which Air Canada would acquire all of the shares of Transat at a price of $13.00 per share. During such exclusivity period, it is contemplated that Air Canada will complete its due diligence review and the parties will finalize the negotiation of a definitive agreement regarding this transaction, the material terms of which are announced today.

"This announcement is good news for Transat", said Jean-Marc Eustache, President and Chief Executive Officer of Transat. "This is an opportunity to team up with a great company that knows and understands our industry and has had undisputable success in the travel business. This represents the best prospect for not only maintaining, but growing over the long term the business and jobs that Transat has been developing in Quebec and elsewhere for more than 30 years."

Transat would like to point out that its operations continue in the normal course and that there will be no change for its clients, suppliers and employees. In particular, travellers and clients of Transat can continue to travel and book their vacation packages with Transat like before.

Context of the Announcement

The Board of Directors of Transat has agreed to the exclusivity agreement based on a unanimous recommendation from a special committee of independent directors that was charged with examining any proposals for the acquisition of the shares of Transat, with the assistance of financial and legal advisors, and with considering all strategic options, as was announced on April 30, 2019. After being solicited by several parties and having considered available alternatives, the Board of Directors has determined that it is now in the interests of Transat and its stakeholders to finalize negotiations on an exclusive basis with Air Canada with a view to completing the transaction. In its recommendation, the special committee considered many factors, including the interests of the Corporation and its stakeholders, the economic and regulatory environment in which Transat operates, the proposed price of $13.00 per share, which represents a premium of 148.5% over the 20-day weighted average trading price prior to the announcement of April 30, 2019, a premium of 47.8% over the 20-day weighted average trading price for the period ended May 15, 2019, the terms of Air Canada's proposal, which it deemed reasonable and acceptable taken as a whole, including the duration of the exclusivity period, the disclosure of the main terms of the letter of intent, the covenants of Air Canada and the contemplated terms of the definitive agreements.

Additional Terms of the Letter of Intent

The letter of intent sets forth certain terms that will be required in the definitive agreement. These terms include a break fee of $15 million payable by Transat in case of termination of the transaction, including upon acceptance of an unsolicited superior proposal, and a reverse break fee of a maximum of $40 million payable by Air Canada in the event that the agreement is terminated because regulatory or governmental approvals are not obtained. In addition, the non-solicitation provision will be subject to the usual withdrawal right based on fiduciary duties if an unsolicited proposal is made at a firm price per share that is at least $1.00 higher than the price offered by Air Canada, in the event such proposal is not matched by Air Canada. Moreover, the execution of a definitive agreement by Air Canada will be subject to the execution of support and voting agreements by certain large shareholders of Transat.

Finally, Transat has agreed to limit its undertakings and expenses relating to the implementation of its hotel strategy during the exclusivity period.

Any agreement will also contain numerous conditions customary for this type of transaction, including applicable regulatory approvals and the approval of the shareholders of Transat.

There is no assurance that a definitive agreement will be reached in relation to any transaction following the exclusivity period and the ongoing discussions. No assurance may be given that a transaction will occur in relation to the proposed transaction or otherwise, or regarding the definitive terms of such transaction, if any.

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