Quebec developer Group Mach out of running to buy Transat, rattling shareholders

MONTREAL — Group Mach said Wednesday it is no longer in the running to buy Transat A.T., stating the tour operator chose to ignore its proposal even though it featured a higher price than Air Canada’s offer.

Alfred Bugge, head of mergers and acquisitions at Group Mach, said Transat was well aware of the Quebec developer’s $14-per-share offer last week but forged ahead with an Air Canada takeover agreement priced at $13 per share.

“We have no intention of submitting a superior proposal as defined in the definitive agreement between the two companies,” Bugge told The Canadian Press.

“Transat did not even take the time to communicate with us. We had no acknowledgment, no phone call, zero,” he said. “Why would we submit a higher proposal again? It would be ridiculous.”

Under the agreement, Transat shareholders will convene by Aug. 26 to vote on the Air Canada deal, valued at $520 million. Until then Transat can accept competing offers of at least $14 per share on top of a $15-million break fee for Air Canada, which could opt to match the superior bid.

The current deal faces legal and regulatory scrutiny along with resistance from Transat shareholders Letko, Brosseau and Associates and PenderFund Capital Management, which jointly own a 22.06 per cent stake.

The withdrawal may concern some major shareholders who say Air Canada’s successful bid is too low and want more offers on the table.

“We believe Air Canada’s offer doesn’t reflect the value of Air Transat,” PenderFund portfolio manager Amar Pandya said in an email last week.

Montreal-based FNC Capital and Quebecor Inc. chief executive Pierre Karl Peladeau have previously expressed interest in Transat. “We would encourage those interested parties to make a formal offer to the board of directors,” Pandya said.

Transat declined to comment on whether the tour operator has received other proposals since last week.

Spokesman Christophe Hennebelle said then that Group Mach’s offer was technically void following the announcement of the Air Canada deal, since a condition of the Group Mach proposal was that Transat hold off on an agreement with the nation’s largest airline.

The two companies announced the transaction last Thursday, which will preserve the Transat and Air Transat brands and keep the head office and key functions in Montreal.

Transat shares dropped $1.10 or more than eight per cent to close at $12.39 on the Toronto Stock Exchange Wednesday.

Just Posted

Maskwacis RCMP arrest, charge wanted man

A Maskwacis man is facing weapons-related charges after allegedly resisting arrest. Two… Continue reading

The shelter is full: Many abused women and children in central Alberta will face a tough holiday

Alberta has one of highest domestic violence rates in the country, says a report

‘Heart of darkness:’ Closing arguments in Calgary quadruple killing trial

CALGARY — Lawyers for a pair accused in a quadruple killing say… Continue reading

Chinese ambassador warns Canada against adopting motion calling for sanctions

MONTREAL — China’s new ambassador to Canada is threatening “very firm countermeasures”… Continue reading

Liberal MP Anthony Rota upsets Regan to become Speaker in minority Parliament

OTTAWA — Liberal MP Anthony Rota has been elected Speaker of the… Continue reading

Your community calendar

Tuesday The Central Alberta Council on Aging will hold its Christmas General… Continue reading

‘Heart of darkness:’ Closing arguments in Calgary quadruple killing trial

CALGARY — Lawyers for a pair accused in a quadruple killing say… Continue reading

Milan Lucic scores first as a Flame, Calgary beats Buffalo

Flames 5 Sabres 3 CALGARY — Milan Lucic scored his first goal… Continue reading

Chinese ambassador warns Canada against adopting motion calling for sanctions

MONTREAL — China’s new ambassador to Canada is threatening “very firm countermeasures”… Continue reading

Liberal MP Anthony Rota upsets Regan to become Speaker in minority Parliament

OTTAWA — Liberal MP Anthony Rota has been elected Speaker of the… Continue reading

Supreme Court won’t hear appeal from former Nazi death squad member

Jewish groups across the country hailed the Supreme Court’s decision not to… Continue reading

Consensus comes 30 years later that Montreal massacre was an anti-feminist act

MONTREAL — Thirty years after the worst mass shooting in Canadian history,… Continue reading

Angry Alberta legislature sitting ends with cross-party fight over room booking

EDMONTON — The fall sitting of the Alberta legislature has wrapped up,… Continue reading

Most Read