Murmurs of Quebec’s favoured child, Pierre Karl Péladeau, winning the Transat trophy have been circulating in Canada’s travel industry halls for some time now. With Air Canada officially out of the running, Péladeau is reinvigorating his courting of the operator with flattery and playing the Quebec card.
Speaking on Quebec talk show “À vos affaires”, the Quebecor CEO said, “One thing is certain — and this is one of the fundamental reasons for which I was and I am still interested in acquiring Transat — it is an exceptional brand.”
Péladeau reiterated his wishes to keep the company built by Jean-Marc Eustache and “ensure that this company remains in the Quebec aviation landscape, that the head office remains here in Quebec in Montreal and that jobs can continue to benefit the Quebec economy.”
Transat has indicated it is willing to hold discussions with Péladeau.
“Now that the Arrangement Agreement has been terminated, Transat is free to hold discussions with potential strategic and financial acquirers, including Mr. Pierre Karl Péladeau, whose investment company, Gestion MTRHP Inc., previously made (and since reiterated) a proposal to acquire all of the issued and outstanding shares of Transat for $5 a share. The Board intends to examine available strategic alternatives, including the pursuit of the Corporation’s stand-alone business plan.”
Airline publication SimpleFlying writes that Transat, finding itself in a position of weakness, could see offers for less than $5 a share due to lack of competitive bids. Which raises the question as to whether Péladeau himself will drop the bidding price.
Meanwhile, the federal government is looking into Transat’s plight and options to protect those jobs.
Transport Minister Omar Alghabra said in a statement that he had spoken with Transat and the two sides were “examining next steps.”
A Transat spokesman said the airline’s priority was securing financing and its recovery plan. Transat needs at least $500 million in new financing in 2021. It also has a $250 million short-term subordinated credit facility due on 30JUN.
The tour operator said it was at an “advanced stage” of discussions on federal government support for the airline sector and accessing Ottawa support for business affected by the pandemic.
Having witnessed the speed at which the government has been moving to support the industry, Open Jaw’s bet is on Péladeau winning the race.