Air Canada looked like it was going to head straight in to an easy buyout of Air Transat. Not any more.
Canadian real estate development company Group Mach, based in Montreal has outbid the airline for Air Transat’s parent company, offering C$527.6 million, more than C$7 million more than the Air Canada offer.
The offer was contingent on Air Transat ending talks with Air Canada, but they are in the middle of an exclusive bid process. However Air Transat may legally have to look at its options as shareholders are entitled to any deal that improves their share values.
There is also nothing stopping Air Canada matching or exceeding the offer until the deal concludes. In the end C$7 million is a drop in the ocean in deals like this.
Another twist is that Group Mach’s offer is part contingent on the Government of Quebec offering it C$120 million in financing to buy the Air Transat’s Group, which includes hotels, travel agents and the airline. The Air Canada offer doesn’t require any taxpayer assistance to make the deal happen, but Group Mach will keep Air Transat in Quebec and intact, something the independently mined province is likely to favour quite strongly. Air Canada is more likely to eliminate it completely.