Transat AT Inc.'s shareholders have voted to approve the sale of the company to Air Canada for $5 per share, according to reports.
A virtual meeting was held on Tuesday morning (Dec. 15) where shareholders voted in favour of the transaction, which was also recommended by the company's leadership.
“We are satisfied with shareholder support for this revised arrangement,” commented Jean-Marc Eustache, president and CEO of Transat, in reaction to the massive approval (90.05%) of the revised arrangement with Air Canada.
The support expressed at Tuesday's meeting “will lead to the creation of a world leader in leisure travel who will be established in Montreal and who will have the scale necessary to overcome the current turmoil in the industry and to thrive thereafter," said Mr. Eustache.
“We are convinced more than ever that it is in the interests of all of our stakeholders to join forces with Air Canada," he said.
The news comes after the Montreal-based tour operator posted a $238.1M Q4 loss on Dec. 11, capping a devastating year.
Mr. Eustache said the damaging results "reflect COVID-19's devastating impact across the travel industry."
The Air Canada-Transat deal is expected to close in early 2021 following regulatory approval from EU antitrust regulators.
The European Commission (EC) is saying that it needs until Jan. 8, 2021, to make a final call on the transaction.
The EC, which oversees competition policy in the 27-member European Union, is currently studying the deal to determine if it will hinder competition, increase prices and lead to fewer choices for consumers.
In March, the Competition Bureau of Canada was unfavourable to the transaction, but it should be noted that their analysis was done before the COVID-19 pandemic outbreak.
Air Canada lowered its price to buy Transat to reflect today's current economic conditions, which have changed due to the coronavirus crisis since the deal was first approved by Transat shareholders in August 2019.
The value of the agreement has also changed significantly as air travel continues to face unprecedented challenges due the downturn in demand.
The deal is now worth approximately $190 million (CAD), down from C$720 million previously.
Transat's shares were up 50 cents, or 9.54 per cent, at $5.79 in late morning trading on the Toronto Stock Exchange.
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