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Johnboy

Air Canada To Purchase Air Transat

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I think all those involved with this deal will want TS to end up with AC. No other group has the experience or background to have this operation join or merge into their company. 

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12 minutes ago, blues deville said:

I think all those involved with this deal will want TS to end up with AC. No other group has the experience or background to have this operation join or merge into their company. 

Except that the final decision is up to the TRZ shareholders.

If the outcome is inevitable (sale of shares) then the only metric that matters to the shareholders is who will pay the most for a share.

There are no future considerations for a TRZ shareholder.

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1 hour ago, rudder said:

Except that the final decision is up to the TRZ shareholders.

If the outcome is inevitable (sale of shares) then the only metric that matters to the shareholders is who will pay the most for a share.

There are no future considerations for a TRZ shareholder.

That's true, but the board's due diligence would include an assessment of the certainty that a deal can be concluded with the highest bidder. If it believes the Quebec government will not provide Mache with the required financing and that the deal will not proceed without it, then the AC bid remains the only "real and viable" one of the table, notwithstanding the shareholders' wishes.

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Quebec government will almost certainly want a part in a "Quebec company". They have already signalled their willingness to invest to keep the company and jobs in Quebec. The board will also likely endorse such a deal as it would have the provincial government "invested" in the success of the company. Most staff will also likely prefer this as it will transform Transat into a higher profile company with more funds to secure more assets and growth.

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44 minutes ago, MD2 said:

Quebec government will almost certainly want a part in a "Quebec company". They have already signalled their willingness to invest to keep the company and jobs in Quebec. The board will also likely endorse such a deal as it would have the provincial government "invested" in the success of the company. Most staff will also likely prefer this as it will transform Transat into a higher profile company with more funds to secure more assets and growth.

I'm not so sure about the last part.  What value is there in a company having a higher profile if it continues to lose money?

I have no idea in whose hands TS will end up and I'm well aware of how messy airline mergers are.  I'd still wager that an amalgamation with AC would return TS to profitability.

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What does a real estate company know about running an airline and tour company?

 

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18 hours ago, FA@AC said:

I'm not so sure about the last part.  What value is there in a company having a higher profile if it continues to lose money?

I have no idea in whose hands TS will end up and I'm well aware of how messy airline mergers are.  I'd still wager that an amalgamation with AC would return TS to profitability.

Did Air Canada's last merger make it profitable? As I recall it filed for bankruptcy and cancelled all its shares. Few years later, it almost went bankrupt again! It seems that mergers don't necessarily make companies profitable, sound business plans do. I can't say with any certainty which route would be better for Transat, but judging by recent comments, and considering the "Quebec factor", I'd say a deal that has the government of Quebec invested in it and supposedly keeps the jobs in Quebec will garner more support.

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Just read this on the AC site

Jon Turner was appointed President, Rouge Operations in June 2019, where he has oversight for all aspects of leisure carrier Air Canada Rouge, including a focus on its distinct brand and culture.

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1 hour ago, AMEfirst said:

Just read this on the AC site

Jon Turner was appointed President, Rouge Operations in June 2019, where he has oversight for all aspects of leisure carrier Air Canada Rouge, including a focus on its distinct brand and culture.

Who is Jon Turner?

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Bio

Jon Turner was appointed President, Rouge Operations in June 2019, where he has oversight for all aspects of leisure carrier Air Canada Rouge, including a focus on its distinct brand and culture.

Jon was named Air Canada's Vice President, Maintenance when he re-joined Air Canada in February 2018. In that role, he had direct responsibility for managing and providing strategic direction for Air Canada's global maintenance programs, core engineering, fleet management, control of technical safety and airworthiness standards, maintenance operations control, supply chain, as well as line maintenance.  

A skilled airline executive with expertise in operations, Jon began his career at Air Canada in 1980 where he held a wide range of progressively critical, senior operational roles including responsibility for all aspects of Air Canada's aircraft acquisition and disposal. In 2004, he was appointed Vice President, Maintenance and Engineering and he had oversight for the airline's maintenance programs, engineering, fleet management, airworthiness, maintenance operational control, line and cabin maintenance. In 2008, he joined Air Transat and was appointed Executive Vice President, Air Transat in 2011. In 2016, he subsequently became Chief Executive Officer and President at Sky Regional, a Canadian airline that operates flights on behalf of Air Canada under the Air Canada Express banner.

Jon holds a Bachelor of Engineering degree from McGill University in Montreal.

 

knows Transat well

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Interesting change, I wonder where the necessary $$$ will be now coming from?  Will we need to follow the dollars? ?

 

Mach Waives Financing Condition for its Acquisition of Transat

 
‎Today, ‎June ‎25, ‎2019, ‏‎2 hours ago | Canadian Aviation News

Provided by Group Mach Inc./CNW

MONTREAL, June 25, 2019 /CNW Telbec/ – Group Mach Inc. (“Mach”) is pleased to announce its non-binding agreement with the Government of Quebec in connection with Mach’s formal proposal to acquire all issued and outstanding voting shares (the “Shares”) of Transat A.T. Inc. (TSX: TRZ) (“Transat” or the “Company”) at a price of $14.00 cash per Share to the attention of the Board of Directors of Transat as announced in Mach’s press release of June 14, 2019 (the “Proposal”). As such, Mach has deposited today an amended version of its Proposal with the Board of Directors of Transat by, in particular, removing conditions related to financing from the Government of Quebec and the execution of support and voting agreements with the Fonds de solidarité FTQ and the Caisse de dépôt et placement du Québec (the “Amended Proposal”). Such Amended Proposal only contains the following conditions:

  • Transat terminating its current process with Air Canada prior to entering into any definitive acquisition agreement with Air Canada;
  • The execution of a confidentiality agreement between Transat and Mach which includes a period of 30 days to complete due diligence and execute a definitive acquisition agreement between Mach and Transat during said period; and
  • The receipt of customary regulatory approvals, namely the review of the Amended Proposal by federal competition and transportation authorities (the “Key Regulatory Approvals”).

Of note in regards to Key Regulatory Approvals, Mach, TM Grupo Inmobiliario (“TM”) and their subsidiaries do not carry on any activities in Canada in any of the segments of current activities of Transat. In particular, neither Mach nor TM or any of their subsidiaries operate an airline anywhere in the world. Mach shall preserve all existing operational activities of Transat post-closing of our proposed acquisition of Transat.

Considering the confidential nature of the above-mentioned agreement between Mach and the Government of Quebec, Mach will not comment any further in this regard. For greater certainty, the Amended Proposal is not contingent in any respect upon such agreement.

We look forward to the Board of Directors of Transat working with us to solidify the long-term profitability of the Company as a strong and independent global leading vertically integrated leisure travel brand under the banner of Transat, thus successfully carrying out the Company’s strategic plan of 2018-2022 and preserving the legacy of its founders.

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2 hours ago, Turbofan said:

https://www.lapresse.ca/affaires/entreprises/201906/25/01-5231529-un-financier-evoque-une-offre-de-17-a-20-laction-pour-transat.php

Looks like a third interested party with partners trying to stay under the radar.  Any who the partners might be?

No but I would bet  dagger may have an idea. The interesting part of this, if I am correct that  MACH is privately owned (not publicaly traded) and the other named partner is also, I wonder then how the rules around foreign ownership would work / be applied? 

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1 hour ago, mrlupin said:

Not a done deal until the shareholders approve it, and if I was a major shareholder I might be more interested in the higher offer from the other guys.

Edited by conehead

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5 minutes ago, conehead said:

Not a done deal until the shareholders approve it, and if I was a major shareholder I might be more interested in the higher offer from the other guys.

it isn't all about money.  The other guy has no airline experience

 

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Lots of employee shareholders too. Some of the originals were former QB Air crews who ended up wealthy. I would be in favour of the AC purchase with all the benefits of being part of a national airline. 

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Other bidders circling as Transat agrees to Air Canada's $13-a-share takeover offer

The company that owns Air Transat has agreed to be taken over by Air Canada for $13 a share, following up on last month's announcement they had entered into exclusive negotiations.

Transat management gives blessing to takeover, despite higher offers on the table

Pete Evans · CBC News · Posted: Jun 27, 2019 8:30 AM ET | Last Updated: 20 minutes ago
air-transat-air-canada-composite.jpgAir Canada will buy Air Transat for $520 million, pending regulatory approval. (Shutterstock)

The company that owns Air Transat has agreed to be taken over by Air Canada for $13 a share.

The two companies announced in May they had entered negotiations toward a possible deal, and gave themselves 30 days to hammer out the details.

That period expired on Wednesday, and on Thursday morning they announced a deal that would see Air Canada buy Transat A.T. Inc. for $13 per share, which values the company at $520 million.

The plan is to maintain the two companies as separate entities, maintaining the two different brands, head offices and key functions in Montreal, the companies said in a release.

"This combination delivers excellent value, while also providing increased job security for both companies' employees through greater growth prospects," Air Canada CEO Calin Rovinescu said.

Transat CEO Jean-Marc Eustache said the deal represents "the ideal platform for Transat's presence and jobs in Montreal, and therefore represents the best option for all our stakeholders: employees, suppliers, partners and shareholders."

Air Canada CEO Calin Rovinescu says the deal is a good one for both sides. (Graham Hughes/Canadian Press)That's a veiled reference to another, ostensibly better financial offer on the table for the company. Once word of Air Canada's interest emerged in May, Montreal real estate developer Group Mach declared it would also be interested in buying Transat, for a higher price of $14 a share.Other bidders, including Montreal-based investment firm FNC Capital, have also expressed an interest in buying Transat, with FNC saying as recently as this week it thinks Transat is worth at least between $17 and $20 a share."I have informed my group that according to my presentiment, this potentially historical transaction shall not be done under 18 dollars a share," FNC founder and president Dominik Pigeon said this week. "This will most likely be a hard and long contest, far more [fraught] than what people currently expect."Shareholders, regulatory agencies still hurdles Mach reiterated their interest and desire in entering negotiations as recently as this week, but Thursday's news suggests Air Transat's management has no interest in pursuing that option.While the merger of the two Montreal-based airlines has the blessing of both companies' management teams, it is far from a done deal.Shareholders will have to weigh in and regulatory agencies will have a say, as the move would consolidate Canada's airline industry in even fewer hands.Canada's Competition Bureau confirmed to CBC News on Thursday it's aware of the share agreement and plans to review it."While I cannot speak to the specifics of a bureau merger review for reasons of confidentiality, under the Competition Act mergers of all sizes and in all sectors of the economy are subject to review by the commissioner of Competition to determine whether they will likely result in a substantial lessening or prevention of competition in Canada," spokesperson Jayme Albert said.If the deal falls apart, Air Canada would pay a break fee of $40 million to Transat, or Transat would pay $15 million to Air Canada, depending on why the deal fell apart.Analyst Chris Murray of AltaCorp Capital said he believes the deal is a good one for both sides, and likely to succeed in the end."We view the transaction as positive for all stakeholders, seeing several complementary synergies available to Air Canada that we expect to enhance earnings in the coming years," Murray said. The initial response from investors, however, was less enthusiastic. When stock markets closed on Wednesday, Transat shares were valued at $14.19 apiece — above the level of both the Mach offer and the lower Air Canada offer.When word emerged of the deal and shares began trading on Thursday, Transat shares lost seven per cent and were changing hands at $13.15 a share.Air Canada shares, meanwhile, gained almost five per cent or $1.80 to $41.06, a sign Air Canada investors love the deal, from their perspective.One significant factor in favour of the deal is the biggest single owner of both companies' shares is Montreal investment firm Letko Brosseau & Associates, which owns almost 10 per cent of Air Canada and just over 17 per cent of Transat shares.When asked, Letko Brosseau declined to comment for this story.

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https://www.theglobeandmail.com/business/article-quebecs-groupe-mach-withdraws-14-a-share-bid-for-transat/

Group Mach said Wednesday it is withdrawing its bid for Transat A.T., stating the tour operator chose to ignore its proposal even though it featured a higher price than Air Canada’s offer.

Alfred Buggé, head of mergers and acquisitions at Group Mach, said Transat was well aware of the Quebec developer’s $14-per-share offer last week but forged ahead with an Air Canada takeover agreement priced at $13 per share.

“We have no intention of submitting a superior proposal as defined in the definitive agreement between the two companies,” Bugge told The Canadian Press.

“Transat did not even take the time to communicate with us. We had no acknowledgment, no phone call, zero,” he said. “Why would we submit a higher proposal again? It would be ridiculous.”

Under the agreement, Transat shareholders will convene by Aug. 26 to vote on the Air Canada deal, valued at $520 million. Until then Transat can accept competing offers of at least $14 per share on top of a $15-million break fee for Air Canada, which could opt to match the superior bid.

The current deal faces legal and regulatory scrutiny along with resistance from Transat shareholders Letko, Brosseau and Associates and PenderFund Capital Management, which jointly own a 22.06 per cent stake.

The withdrawal may concern some major shareholders who say Air Canada’s successful bid is too low and want more offers on the table.

“We believe Air Canada’s offer doesn’t reflect the value of Air Transat,” PenderFund portfolio manager Amar Pandya said in an e-mail last week.

Montreal-based FNC Capital and Quebecor Inc. chief executive Pierre Karl Peladeau have previously expressed interest in Transat. “We would encourage those interested parties to make a formal offer to the board of directors,” Pandya said.

Transat declined to comment on whether the tour operator has received other proposals since last week.

Transat and Air Canada announced the transaction last Thursday, which will preserve the Transat and Air Transat brands and keep the head office and key functions in Montreal.

Transat shares dropped 95 cents or more than seven per cent to $12.54 in mid-afternoon trading Wednesday.

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“Transat did not even take the time to communicate with us. We had no acknowledgment, no phone call, zero,” he said. “Why would we submit a higher proposal again? It would be ridiculous.”

Seems kinda rude.

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2 hours ago, conehead said:

“Transat did not even take the time to communicate with us. We had no acknowledgment, no phone call, zero,” he said. “Why would we submit a higher proposal again? It would be ridiculous.”

Seems kinda rude.

Or perhaps they just discounted the bid based on the lack of aviation credentials . 

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