Air Canada’s proposed purchase of Air Transat has hit a hurdle, as the largest shareholder of both airlines has opposed the preliminary bid.
According to La Presse, Peter Letko and Daniel Brosseau of Montreal-based asset management firm Letko-Brosseau have stated that Air Transat is more valuable than Air Canada’s $520 million purchase bid. The firm has approximately 20 per cent ownership in Transat and approximately 10 per cent in Air Canada, valued at $80 million and $1.1 billion respectively, the report said.
Brosseau is quoted in the report as stating, “If Transat was really worthless, Air Canada should not be interested. So if Air Canada is interested, it's because of its activities. They should therefore pay a price that reflects this value.”
The purchase requires a two-thirds majority of shareholders to approve, a deal which could be blocked if Letko-Brosseau wins over support from other shareholders such as Caisse de depot and Fonds FTQ, the report said.
Air Canada’s bid was announced May 16, following Transat’s April 30 announcement that it was looking for a buyer.
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