According to the Journal de Montréal, Quebecor President and CEO Pierre Karl Péladeau has given up on buying Transat.
Mr. Péladeau, who had submitted a proposal to acquire the company on Dec. 22 through his management company MTRHP, told the Quebec-based news outlet that he "currently no longer has an interest" in this file, due to the wishes of the main shareholder of Transat, Letko Brosseau, to obtain $5 per share for the tour operator.
"I do not agree with his assessment," said PKP on Thursday (May 13) in an interview after a shareholders' meeting.
“If I make a new offer, I know it won't work. So what's the point of making one if we know that the largest shareholder will refuse?" Péladeau, speaking in French, was quoted as saying.
Shortly after the the termination of the arrangement agreement between Transat and Air Canada in April, Mr. Péladeau, also known by his initials "PKP," said his initial offer to acquire Transat was still valid.
President and Chief Executive Officer of Transat, Jean-Marc Eustache, in April, pointed out that the termination allowed Transat to conduct discussions with other strategic buyers and potential financiers - including Mr. Péladeau.
At the time, PKP said it was "no surprise" that Transat and Air Canada agreed to call off their transaction after the European Commission refused to approve it.
“By purchasing Transat, being a direct competitor for the vast majority of transatlantic routes and "sun destinations," Air Canada would have captured more than 60 per cent of the market, an unacceptable threshold that would have deprived consumers of competition in terms of prices," PKP said in an interview with TVA Nouvelles.
In that same interview, Mr. Péladeau spoke highly of Transat, calling it an "exceptional brand" that Mr. Eustache has built successfully.
In a statement on Friday (May 14), Transat AT issued a response to PKP's remarks.
The Montreal-based company said it as "has taken note of Mr. Péladeau's public statements" but clarified that it has not received any formal communication from PKP on the matter.
On April 7, 2021, Péladeau delivered to Transat a non-binding proposal contemplating a transaction pursuant to which MTRHP would acquire all of the shares of Transat for a consideration of $5.00 per share, payable in cash, Transat confirmed.
"Although this proposal required a response within two days, the parties have from that date and until May 13 continued their discussions on the basis of this proposal and it has been thoroughly reviewed by the special committee of independent directors responsible for evaluating any proposal to acquire the Transat shares with the assistance of financial and legal advisors,' the company said in a statement.
Transat recently secured funding worth as much as $700M from the Canadian government via the Large Employer Emergency Financing Facility (LEEFF).
The emergency aid includes loan facilities worth $390M to fund the company’s operations and another $310M to refund customers for cancelled flights during the pandemic, a decision that the company says will not involve recalling travel agent commissions.
"This additional liquidity allows the company to plan for the resumption of its operations and the implementation of its strategic plan for the coming years," Transat said on Friday.
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