Westjet

[QFE 77]

Bnn reporting WestJet is being bought by ONEX.

[vrefplus5 1]

They wanted AC back in the day as well.

[dagger 567]

Here's he release

 

https://www.newswire.ca/news-releases/westjet-to-be-acquired-by-onex-847792523.html

 

CALGARY, May 13, 2019 /CNW/ - WestJet Airlines Ltd. ("WestJet")(TSX: WJA) announced today it has entered into a definitive agreement that provides for its acquisition in an all-cash transaction. Under the terms of the agreement, Onex Corporation ("Onex")(TSX: ONEX) and its affiliated funds will acquire all outstanding shares of WestJet for $31.00 per share, after which WestJet will operate as a privately-held company. The purchase price represents a 67% premium to Friday's closing share price and a 63% premium to WestJet's 20-day volume-weighted average trading price. The transaction value is approximately $5 billion including assumed debt.

"Since our first flight in 1996, WestJet has been singularly focused on providing better options for the Canadian travelling public and this transaction retains that commitment," said Clive Beddoe, WestJet's Founder and Chairman. "I am particularly pleased that WestJet will remain headquartered in Calgary and will continue to build on the success that our 14,000 WestJetters have created. Onex' aerospace experience, history of positive employee relations and long-term orientation makes it an ideal partner for WestJetters, and I am excited about our future."

 

 

It's a fair bet Onex will turn around and sell part to a foreign investor - a lot neater than that foreign buyer operator being the largest shareholder in a diverse shareholder base.Yes, its 1999 all over again.

 

 

Edited May 13, 2019 by dagger

[dagger 567]

I'd guess that this will also be a big day for Air Canada shares

[QFE 77]

18 minutes ago, vrefplus5 said:

They wanted AC back in the day as well.

They also owned and made a nice profit with SKYCHEF.

[thinair 15]

Could Onex be the ones looking at Transat also?

Does anyone recall why Onex didn’t get AC?

[rudder 150]

Likely that any employee incentive programs that are not codified in collective agreements are likely to be terminated.

WJ was changing anyway. The culture is no longer a selling point for staff.

As bad as it was at the bargaining table, the focus on the bottom line is going to be even more focused. ONEX does not disclose the financing for the cash portion of the deal. There will be incremental debt service costs going forward.

 

[Johnboy 64]

It's Deja Vu all over a gain. Only thing missing is Nigel Wright....official ONEX presser....

https://ir.onex.com/static-files/92bfa37b-1bb4-4fc8-8f31-f6da878d1b05

[dagger 567]

23 minutes ago, thinair said:

Could Onex be the ones looking at Transat also?

Does anyone recall why Onex didn’t get AC?

Westjet did supposedly make an offer for Transat, and AC was invited to counter and supposedly did, and there may be other bids on the table. Obviously the Transat board would like a bidding war.

As for the Onex story back from 1999, it would take too much time for me to give you the full story. Suffice it to say that pairing with AMR to take out AC and merge it with Canadian was probably a mistake - it rallied strong forces against it, which produced a highly leverage counter proposal that topped ONEX and eventually resulted in the latter to drop its bid. That triggered such a wild timeline for AC - Milton, merger, bankruptcy, ACE... I wonder how history would have unfolded if CP had simply gone under. Would AC have stumbled along the line somewhere, run afoul of governments and regulators in other ways... Who knows.

[rudder 150]

AC may become more aggressive in its TRZ offer in response. Close doors on WJ expansion on the Atlantic from the east.

AC is sitting in a ton of cash.

[dagger 567]

I wonder if ONEX would have the stomach to add even more debt to Westjet's balance sheet to fight AC or others on Transat

 

AC stock opening up 4%

Edited May 13, 2019 by dagger

[internet 65]

What are the odds Delta takes a slice from Onex?

[dagger 567]

Just now, internet said:

What are the odds Delta takes a slice from Onex?

I'm figuring that someone might. Delta is the most logical from a US perspective.

[Geminoid 5]

1 hour ago, thinair said:

Could Onex be the ones looking at Transat also?

Does anyone recall why Onex didn’t get AC?

Wasn't there something about the pension plan at AC that Onex didn't like/want?

[jackr 10]

39 minutes ago, dagger said:

Westjet did supposedly make an offer for Transat, and AC was invited to counter and supposedly did, and there may be other bids on the table. Obviously the Transat board would like a bidding war.

As for the Onex story back from 1999, it would take too much time for me to give you the full story. Suffice it to say that pairing with AMR to take out AC and merge it with Canadian was probably a mistake - it rallied strong forces against it, which produced a highly leverage counter proposal that topped ONEX and eventually resulted in the latter to drop its bid. That triggered such a wild timeline for AC - Milton, merger, bankruptcy, ACE... I wonder how history would have unfolded if CP had simply gone under. Would AC have stumbled along the line somewhere, run afoul of governments and regulators in other ways... Who knows.

where'stheBEANWHENYOUNEEDONE

[dagger 567]

1 minute ago, jackr said:

where'stheBEANWHENYOUNEEDONE

Assuming he still has a lot of Westjet stock, the Bean is probably counting his profits today!

He's still lurking here.

 

[thinair 15]

39 minutes ago, dagger said:

Westjet did supposedly make an offer for Transat, and AC was invited to counter and supposedly did, and there may be other bids on the table. Obviously the Transat board would like a bidding war.

As for the Onex story back from 1999, it would take too much time for me to give you the full story. Suffice it to say that pairing with AMR to take out AC and merge it with Canadian was probably a mistake - it rallied strong forces against it, which produced a highly leverage counter proposal that topped ONEX and eventually resulted in the latter to drop its bid. That triggered such a wild timeline for AC - Milton, merger, bankruptcy, ACE... I wonder how history would have unfolded if CP had simply gone under. Would AC have stumbled along the line somewhere, run afoul of governments and regulators in other ways... Who knows.

Thanks, starting to remember now. There was a huge backlash from the AC employees as well.

Merging with Transat would be a nightmare. C3 buying Royal was the anchor that pulled them under.

AC can have em!

[Lakelad 47]

Yeah, there were a lot of moving parts, not the least of which was Quebec court ruling that upheld provision in original AC privatization act that no shareholder could hold more than 10% of shares, Schwartz walked away immediately after that.

[rudder 150]

Acquiring TRZ would give AC unprecedented capacity over the Atlantic.

AC could use the consolidated 330 fleet for the sub 10 hour routes and reallocate the Boeing’s to the longer Atlantic routes and Asia/South Pacific.

Devil is always in the details but I don’t see how this doesn’t work for AC.

[Specs 167]

1 hour ago, thinair said:

 There was a huge backlash from the AC employees as well. 

 

 Schwarz said something negative to the effect of employees getting $250k for working 12 days a month.

(He's gonna be a real big hit with the 'owners' at WJ).

Edited May 13, 2019 by Specs

[Super 80 211]

I don't see how this improves any of the issues WestJet has been muddling through.

I would imagine Schwartz is probably also the interested party behind the unsolicited Transat offer, I suppose he might also want to role Porter into Schwartzflot too.

[Super 80 211]

1 hour ago, rudder said:

Acquiring TRZ would give AC unprecedented capacity over the Atlantic.

AC could use the consolidated 330 fleet for the sub 10 hour routes and reallocate the Boeing’s to the longer Atlantic routes and Asia/South Pacific.

Devil is always in the details but I don’t see how this doesn’t work for AC.

I'm skeptical that Air Canada would want very many of Transat's A330s in the first place.

[MD2 134]

Imo the Onex deal back in 1999 would have produced better results than what ensued in the decade after for Air Canada post Milton era. The executives then out of pride fended off the offer with another offer highly leveraged (especially by foreign partner airlines)that saw them staying in charge. That proved to be a great financial burden. That was a different day.

Today, this provides a good opportunity for WestJet, and contrary to some comments, may culminate in bringing its vision of becoming a global airline to reality. WestJet is a much better choice than Air Canada/Canadian would have been in 1999 for Onex because, as bad as some may think it is, it has far better labour relations than a merged Air Canada/Canadian would have had; it has far lower costs, stronger presence in the leisure market, a lot of room to grow, and on top of all, it knows how to make money.

[thinair 15]

Excellent points MD2. who needs Bean

I expect all Westjetters will still act like owners also. That is if they are aware of airline history and want the company to be successful.

I for one, feel a  mild sense of relief, a little weight taken off my shoulders. Hope its not vertigo. lol

 

[Marshall 218]

Holly cow batman.  Best of luck to all in their new future.