Quite strangely Air Canada don't want Air Transat: Thu 04 Jun 2020
FP helps get word out, Air Canada doesn't want Transat
020-06-04 09:28 ET - In the News
See In the News (C-AC) Air Canada
The Financial Post reports in its Thursday edition that analysts believe Air Canada may be looking to get out of its proposed $720-million acquisition of Transat AT, after COVID-19 crushed the airline sector. The Post's Gabriel Friedman writes that Le Journal de Montreal reported Tuesday, citing three anonymous sources, that Air Canada wants the federal government to block the purchase as it awaits a final decision from Transport Minister Marc Garneau. If true, the move will come as a shock to Transat, which on May 25 said it expects the deal to close in the fourth quarter. The acquisition of Transat was seen as a way for Air Canada to extend its domestic network and capture more international flights. It would be a remarkable reversal as Air Canada spent the past year pushing for approval of the purchase, even sweetening its initial cash offer of $13, made last June, to $18 per share in August. Transat's shares have been trading in the $6 range, suggesting that the market has already baked in a no-deal on Air Canada's offer. Air Canada's share price, which hovered around $40 per share last August, closed Wednesday at $17.99. "Right now [Air Canada is] in cash preservation mode," said Cormark analyst David Ocampo.
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