Air Canada Inc. shareholders, who have profited from a 135% rise in the stock since early July, now have more reason to be bullish thanks to ACE Aviation Inc., the airline’s majority shareholder.
ACE said Friday that it has entered into an bought deal to sell 44 million shares or 59% of its 75 million Air Canada stock at $3.70 per share for proceeds of $162.8-million.
“Although this deal does not fully remove the overhang, we suspect that ACE could end up selling the remaining 31 million shares if the demand for this deal were sufficient,” Claude Proulx, an analyst at BMO Capital Markets said in a note to clients.
“The timing appears attractive, as it allows investors to quickly accumulate a sizable position in Air Canada at a time when earning momentum is strong.”