Pierre Karl Péladeau’s courting of Transat may not be going smoothly. At least one Transat shareholder isn’t impressed with what the Quebec businessman is offering, and says he’s not prepared to “give it away.”
Peter Letko, VP of Letko Brosseau and Associates is Transat AT Inc.’s largest shareholder, with about 13 per cent of Transat’s shares. The company is also an investor in Air Canada. He told the Globe and Mail he will not sell his Transat shares at the price offered by Péladeau.
Letko added that he believes the airline should be able to go it alone if it receives government financing. He supports Transat seeking $500-million in loans and to operate independently, rather than sell at a reduced price.
Péladeau offered $5 a share for the tour operator, the same as Air Canada’s revised price before the deal fell through. However, Air Canada’s offer was for cash and stock in the company, which made it more attractive, Letko said. He added that Mr. Péladeau’s offer would amount to “giving the company away.”
“We would not sell our shares at this price,” he said. Letko added he would support other ways of bolstering the company’s finances, including allowing the government to own equity.
Letko said he has confidence in Transat’s management and future, and believes demand for leisure travel will return when COVID-19 vaccinations have been widely administered and government quarantine restrictions are eased.
“The company has a very nice franchise,” he said in the Globe interview. “People will fly again.”
Transat is currently in discussions with lenders to extend an 29APR debt deadline. Negotiations with the federal government for loans totalling $500-million are at an “advanced” stage, TS spokesperson Christophe Hennebelle told the Globe.
Pierre Fitzgibbon, Quebec’s Economy Minister, said at a news conference that Transat has drawn the interest of investors other than Mr. Péladeau but did not name them, according to the Globe.