Air Canada raises the purchase price for Air Transat

Air Canada and Transat A.T. Inc. has made this joint announcement:

  • Air Canada to increase its purchase price from $13 to $18 per share, representing an aggregate purchase price of approximately $720 million
  • Letko Brosseau, Transat’s largest shareholder holding approximately 19.3% of outstanding shares, has entered into a lock-up and support agreement, confirming its support for the Air Canada acquisition

Air Canada and Transat A.T. Inc. have announced that Air Canada has agreed to increase the purchase price for the acquisition of all issued and outstanding shares of Transat, from $13 to $18 per share and have amended the Arrangement Agreement dated June 27, 2019 accordingly. Based on the increased consideration, the value of the all-cash transaction is approximately $720 million .

Air Canada has also entered into a lock-up and support agreement with Transat’s largest shareholder, Letko Brosseau & Associates Inc., who beneficially owns or has control or direction over 7,277,104 Class B voting shares or approximately 19.3% of all issued and outstanding shares of Transat. Under the terms of its Lock-up and Support Agreement, Letko Brosseau has agreed to support and vote all of the Class B voting shares of Transat it controls at the Special Meeting of Shareholders of Transat on August 23, 2019 or at any adjournment or postponement thereof, in favour of Air Canada’s acquisition of Transat.

Amendments to the Arrangement Agreement between Air Canada and Transat were unanimously approved by the Board of Directors of Transat and its Special Committee, and are included in an Amending Agreement that provides for the following:

  • an increase in the price payable by Air Canada from $13 to $18 per share, for 100% of all issued and outstanding Class A and Class B shares of Transat
  • an increase in the break fee payable by Transat from $15 million to $40 million in case of termination of the agreement in certain circumstances, including upon acceptance of a Superior Proposal that is not matched by Air Canada
  • a change to the definition of Superior Proposal under the Arrangement Agreement, from a third-party unsolicited bona fide written acquisition proposal, made at a firm price per share equal to or exceeding $14 to one that must be equal to or exceed $19 in cash

The terms and conditions of the Arrangement Agreement otherwise remain unchanged.