Quebec Media Baron Makes Push to Break Up Air Canada Deal
(Bloomberg) -- Canadian media executive Pierre Karl Peladeau said he’s ready to step in and buy Transat AT Inc. now that the vacation company’s takeover by Air Canada is on shaky ground.
In a statement on Twitter late Tuesday, Peladeau reiterated his “interest and determination, as well as my means” to buy Montreal-based Transat. He made an attempt last year to do so, but Transat had already agreed to sell to Air Canada for C$5 a share.
That transaction is now in jeopardy after a Feb. 15 deadline passed without approval from European regulators. Although the deal is still alive, both companies now have the right to walk away. That means Transat’s board is free to negotiate with a new buyer, Peladeau wrote.
“I wish to start discussions with the leadership of Transat to enable the Quebec company to exit the grave state of uncertainty in which it’s been kept for too long” and that’s threatening its future, he said. “As I have written, let’s save Transat, together.”
Peladeau, the chief executive officer of cable and media firm Quebecor Inc., made earlier approaches to Transat of C$5 and C$6 a share, according to Transat’s disclosures. The board turned away those offers, saying they weren’t financed and lacked provisions for helping the company with its 2021 working capital needs. Quebecor isn’t involved in the deal.
While Air Canada has yet to clarify its position, Desjardins Securities analyst Benoit Poirier said he expects other interested buyers could come forward, including Onex Corp., the controlling shareholder of Canada’s no. 2 carrier, WestJet Airlines Ltd.
“While WestJet’s CEO recently expressed his disappointment following the federal government’s approval of the deal, we believe the company could also be a potential contender,” Poirier wrote in a note to investors Tuesday. “Such a deal would take time to finalize, although there would be fewer antitrust issues, in our view.”
WestJet CEO Ed Sims criticized the Canadian government’s decision last week to allow the deal, saying it would lead to higher prices and reduced service. Onex didn’t immediately reply to a message seeking comment.
Air Canada agreed in 2019 to buy Transat for C$18 a share, only to cut the price to C$5 a share last October to reflect the new pandemic environment. Transat shares fell 7.8% to C$4.85 on Tuesday in Toronto. Air Canada rose 4.9% to C$23.42, the highest in more than a month.
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