August 19, 2019 / 7:42 PM / 2 months ago

Quebec's Peladeau to vote against Air Canada's Transat bid, mulls offer

MONTREAL (Reuters) - Quebec businessman and former politician Pierre Karl Peladeau said on Monday he will vote against Air Canada’s offer to buy tour operator Transat AT, and would consider making a separate offer with partners if the deal fails.

FILE PHOTO: Parti Quebecois leader Pierre Karl Peladeau looks on after being elected during a ceremony at the convention center in Quebec City, May 15, 2015. REUTERS/Mathieu Belanger/File Photo

Shareholders of the tour operator, which runs leisure carrier Air Transat, decide on Friday whether to back Air Canada’s C$720 million ($540.42 million), or C$18 a share, offer. The deal still requires regulatory approval.

Peladeau, who owns a 1.6 percent stake in Transat, is the CEO of Quebecor Inc. but the media company is not involved in the matter.

Air Canada has locked up support from the tour operator’s largest shareholder Letko Brosseau and analysts largely expect the deal will be approved by a requisite two-thirds of Transat shareholders.

But Peladeau’s comments could encourage some jittery investors to “hold through the closing as opposed to selling,” the stock, given the deal’s need for regulatory approval, said one Transat shareholder on condition of anonymity.

Montreal newspaper La Presse reported last week that Peladeau was holding talks with carriers Air France-KLM and WestJet over a possible bid for Transat. An Air France spokesman and a WestJet spokeswoman declined to comment.

Peladeau said on Monday that he was working with “solid partners” to come up with a potential purchase offer of Air Transat that would keep the carrier competitive, if Air Canada’s deal failed. He did not name the partners.

The Air Canada deal, which gives Transat a 60% market share of select transatlantic routes to and from Canada, would require approvals from domestic and European regulators.

In a statement, Peladeau said he would vote against Air Canada’s offer because it goes against the “best interests” of Transat, “Quebec consumers,” and poses regulatory concerns.

Peladeau, a former Quebec provincial opposition party leader, said he was speaking strictly as a shareholder in the company.

($1 = 1.3323 Canadian dollars)

Reporting by Allison Lampert; Editing by Sandra Maler

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