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CALGARY — Analysts have recommended to shareholders to give the green light on Onex’s acquisition of WestJet, making the deal one step closer towards finalization.
Independent proxy advisory firms Institutional Shareholder Services Inc. (ISS) and Glass, Lewis & Co. have both recommended shareholder to vote for the acquisition at a special meeting of between shareholders and optionholders on July 23 in Calgary.
At the meeting, securityholders will be asked to vote on a special resolution approving an arrangement under the Business Corporations Act involving WestJet, the purchaser Kestrel Bidco Inc., (an affiliate of Onex) and the Securityholders.
“The rationale behind the proposed transaction appears reasonable as current shareholders will get to exit their investment at a significant premium and at multi-year highs for WestJet’s share price,” said ISS. “The cash consideration provides certainty of value, and it appears unlikely that a better offer will be made for the company.”
Glass Lewis also added: “We believe that the merger consideration represents a compelling exit valuation and an attractive market premium for the [WestJet’s] shareholders. In the absence of a superior competing offer, we believe that the arrangement agreement warrants shareholder support at this time.”
The arrangement agreement between WestJet and Onex on May 12 includes the acquisition of all issued and outstanding shares of WestJet at a price of $31.00 per share in cash.
Here are some key reasons for the arrangement: