Air Canada Boosts Transat Offer to $544 Million, Topping Rival

(Bloomberg) -- Air Canada boosted its takeover offer for Transat A.T. by 38%, or C$200 million ($151 million), securing support from the tour operator’s largest shareholder in the process.

Air Canada said late Sunday it will raise the bid to C$18 a share from C$13, bringing the value of the all-cash offer to C$720 million. The sweetened offer has the support of Letko Brosseau & Associates Inc., which owns about 19% of Transat’s shares and had opposed the deal. Transat soared 41% to C$16.60 at 9:35 a.m. in Toronto. Air Canada dropped 1%.

The higher bid is an attempt to fend off an unsolicited offer from Group Mach Inc., a Quebec real-estate developer that’s offered to buy at least 6.9 million of Transat’s Class B shares, or about a fifth of the company, for C$14 a share.

“We are very pleased with the added stability brought about by Air Canada’s increased bid as supported by Transat’s largest shareholder, Letko Brosseau,” Transat Chief Executive Officer Jean-Marc Eustache said in a statement.

The break fee payable by Montreal-based Transat if the agreement is terminated was also increased to C$40 million from C$15 million.

Shareholders will be asked to vote on the competing offers at a special meeting on Aug. 23.

To contact the reporter on this story: Kristine Owram in Toronto at kowram@bloomberg.net

To contact the editors responsible for this story: Brad Olesen at bolesen3@bloomberg.net, David Scanlan

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