Transat’s largest shareholder says he is not interested in “giving the company away” at the price offered by Quebecor President and CEO Pierre Karl Péladeau.
Over the weekend, Mr. Péladeau, who also goes by his initials "PKP," announced that his previous offer to purchase Montreal-based Transat AT for $5 per share (which amounts to roughly $190 million), through his investment company Gestion MTRHP, was still valid after Air Canada’s proposed acquisition of Transat fell through over EU scrutiny.
In an interview with the Globe and Mail, Peter Letko, vice-president of Letko Brosseau and Associates, who owns about 13 per cent of Transat’s shares, said Transat should be fine without an acquirer…if it receives support from the federal government.
Mr. Letko, who is also an Air Canada investor, told the Globe that Air Canada’s offer was for cash and stock in the company, which made it attractive.
He said Mr. Péladeau’s offer would amount to “giving the company away.”
“We would not sell our shares at this price,” Mr. Letko told the Globe.
Ottawa talks reach "advanced" stage
Transat is currently seeking $500-million in loans so it can operate independently. The company is also in talks with lenders to extend an April 29 debt deadline.
Ottawa is still in negotiations with Canada’s airlines in establishing sector-specific aid for aviation.
Several past reports have claimed that the ongoing discussions have reached a critical stage and are near completion.
Transat spokesman Christophe Hennebelle confirmed this point with media on Tuesday (Apr. 6), saying that government talks have reached an “advanced” stage.
Offer still stands
Air Canada and Transat A.T. Inc. mutually agreed to terminate their roughly $190 million-dollar transaction on April 2 after it became clear that the European Commission (EC) was not going to approve the merger.
The EC, which oversees competition policy in the 27-member European Union, was studying the deal to determine if it will impact competition, increase prices and lead to fewer choices for consumers.
Speaking to media on April 2, Mr. Péladeau said he wasn’t surprised to see the deal fall through.
“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," Péladeau told TVA Nouvelles.
Mr. Péladeau said his offer to acquire Transat AT was “still valid” under certain conditions.
“[The offer] ensures, by maintaining an independent Air Transat, a competitive market for the benefit of Quebec and Canadian consumers," said a press release.
Transat, on the day it announced that it was terminating its deal with Air Canada, said in a press release that it was now free to hold discussions with potential acquirers, including with Mr. Péladeau and his investment company.
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