MONTREAL — One of the key players in the tug-of-war for Transat is still on the scene, saying he has the interest and the resources to buy the company should the proposed Air Canada acquisition fall through.
Quebecor Inc. chief executive Pierre Karl Peladeau has been vocal about his desire to buy Transat from early on, even before Air Canada’s announcement on May 16, 2019 that Air Canada and Transat had entered into an exclusive agreement that would see Air Canada acquire Transat for $520 million, later upped to $720 million before dropping drastically to $190 million amid the pandemic.
Throughout summer 2019 both Peladeau and another prospect, Group Mach, made their intentions known, however Transat rebuffed Group Mach and in August 2019 recommended that shareholders support the offer from Air Canada, even as Peladeau hinted he might make an offer.
Things took another turn in January 2021, after a year that saw airlines around the world devastated by the pandemic and its travel restrictions. Transat issued a statement saying that a Dec. 22, 2020 unsolicited proposal from Peladeau’s investment company, Gestion MTRHP, was not supported by binding, fully committed financing.
“This offer, without demonstrated committed financing, appears designed to attempt to adversely influence the regulatory approval process by suggesting that an alternative exists, should the regulatory authorities choose to reject the arrangement between Transat and Air Canada,” said Jean-Yves Leblanc, president of the special committee of Transat’s board of directors, in January 2021.
The proposed Air Canada – Transat deal received approval from the Canadian government on Feb. 11, 2021. All that’s left is a decision from the European Commission, originally slated to be delivered in December 2020, but now delayed until the first half of 2021.
PELADEAU STATES HIS CASE
In a lengthy tweet sent out this week Peladeau again stated his “interest and determination, as well as my means” to acquire Transat. The entire tweet can be seen via Twitter at @PKP_Qc.
Peladeau’s tweet was prompted by the Feb. 15, 2021 expiry of the outside date for finalizing Air Canada’s proposed acquisition of Transat.
As reported yesterday, and as per a status update from Transat, now that the outside date has passed and with the EC’s decision still pending, Air Canada and Transat are entitled, at any time, to terminate their deal upon notice to the other party.
“There can be no assurance that an agreement on any such amendments will be reached, or that Air Canada or Transat will not terminate the arrangement agreement if the relevant circumstances so warrant,” said Transat in its Feb. 16 update.
However as long as neither company terminates or amends the deal, it remains in effect in accordance with all of its terms.
Speculation in the consumer media also suggest that Onex Corp., which acquired WestJet and took the company private in 2019, may also be interested in Transat, however there’s been no comment from Onex.
BOTH COMPANIES WANT TO GET THE DEAL DONE
While the pandemic has upended just about everything in the airline industry, both Air Canada and Transat have been consistent in their desire to get the deal done.
Reports that the federal government could soon be ready to unveil the details of its financial assistance package for the airline industry could stabilize things somewhat for an sector that has seen more than a year of pandemic turbulence.
Air Canada’s Executive VP and Chief Commercial Officer, Lucie Guillemette, had this to say on Feb. 3, 2021 about Air Canada’s proposed acquisition of Transat, in an interview for Travelweek’s Future of Travel online conference: “At this point, as you know, the whole process is going through the appropriate regulatory steps … what I can say is we still believe that if the transaction is to conclude this is actually a very good thing for Canada. It would allow us to compete much better with a lot of international carriers and we also see the two brands as being very complementary.
Guillemette added: “We have a lot of admiration for the Transat brand and the fact that they’re voted Best Leisure Carrier in the World, and we’re proud of having been awarded Best in North America, recognized for our business products. We feel that the two brands complement very well but now we just have to wait for the regulatory process to take its course.”