Any time a country or region imposes any sort of visa stipulation - even if it’s a waiver - the travel industry sighs a collective groan, knowing the obstacles and headaches to come.
MONTREAL — Air Canada has competition in its bid for Transat, now that a rival suitor has stepped up with an offer worth $14 per share, topping Air Canada’s offer of $13 per share.
Quebec-based real estate developer Groupe Mach has come forward with the new bid, causing trading in Transat shares to come to a halt. The shares closed at $11.84 on the TSE on Monday.
According to Groupe Mach, the offer is the culmination of a process that began when it approached Transat in January.
Groupe Mach’s offer includes a commitment to keep Transat’s head office, executive team and centre of decision-making in Montreal.
The news comes almost 3 weeks after Air Canada and Transat announced they had entered into an exclusive agreement, with Air Canada looking to buy the company in a transaction valued at $520 million.
On May 16 Transat said it had agreed to a 30-day period of exclusive negotiations with Air Canada pursuant to a letter of intent contemplating a transaction by which Air Canada would acquire all of the shares of Transat at a price of $13 per share.
When Transat announced on April 30 that it had received interest from more than one company, interested suitors started coming out of the woodwork. One of those suitors was Groupe Mach.
At that time, Vincent Chiara, who owns Groupe Mach, said: “We had the idea of building a portfolio in the hospitality industry and they had a platform and projects in their plans to build exactly that,” referring to Transat’s $750-million plan to develop a hotel chain in Mexico’s Riviera Maya and the Caribbean.
He said Transat’s fleet of about 40 planes is particularly appealing to Groupe Mach, which until now has focused on Quebec real estate.
“They have the means to move the passengers who go to the destination … they have an important capacity to fill rooms and with this capacity, we eliminate a lot of risks for hotel development.
“Of course, we want to privatize … our proposal is to buy out all the shareholders,” he added.
Groupe Mach also said the transaction would be subject to conditions that include “Transat terminating its current process with Air Canada prior to entering into any definitive binding acquisition agreement with Air Canada.”
The Montreal developer also said that no layoffs at Transat or its subsidiaries would result from the would-be deal.
“The public markets are not the proper setting for Transat’s 2018-2022 strategic plan, particularly its hotel development strategy which shall require several years for any meaningful returns to be realized in face of pressures of immediate results from the public markets.”
The other blockbuster airline deal in the making this year, Onex’s acquisition of WestJet, would take WestJet private.
With the proposed deal, Spanish real estate developer TM Grupo Inmobiliario would contribute about $15 million in cash in exchange for a minority equity stake in Transat after the proposed agreement closed. TM would also roll over its three hotels in Mexico to Transat.
With files from The Canadian Press