Soon there may only be one player left in the game to acquire beleaguered Transat.
Canada’s travel industry is watching musical chairs – but in reverse, with participants tripping over themselves to run to the exits rather than getting a seat at the negotiating table.
Following the termination of its acquisition deal by Air Canada last week, Transat kicked its hunt for essential financing to the tune of half a billion dollars into top gear.
“We will now have whatever discussions are necessary to consider all our options,” Transat spokesperson Christophe Hennebelle said in a statement Tuesday, according to the Financial Post.
A number of those options now appear to be off the table, as the report goes on to reveal companies that previously expressed interest in acquiring Transat saying they are no longer vying for the company.
Industry observers have often speculated that Calgary-based WestJet might be a potential suitor for Transat, but it had strongly opposed the reduced competition of Transat’s acquisition by Air Canada, and also confirmed to FP that it is not considering bidding on Transat now.
Montreal-based developer Groupe Mach is no longer interested in the deal, president Vincent Chiara told FP. In 2019, the company had bid for a block of shares in an attempt to block Transat’s deal with Air Canada. Today, FP says that Chiara, “has recently been contacted by other parties interested in submitting a joint bid for Transat, but has turned them down.”
Dominik Pigeon, head of financial services company FNC Capital, was also associated with a group of potential investors in 2019, but now says his company is not currently in a position to make an offer.
Pigeon went on to tell FP in an email, “Péladeau’s offer may be the best one today,” citing the most publicized – and controversial – current ‘live’ offer on the table for Transat.
President and CEO of Quebecor Inc., Pierre Karl Péladeau, has offered $5 a share for Transat, 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, and as Open Jaw reported Wednesday, Transat’s largest shareholder says PKP’s cash-only offer would amount to ‘giving the company away.’
“We would not sell our shares at this price,” Peter Letko, VP of Letko Brosseau and Associates, told the Globe and Mail. Letko added he would support other ways for Transat to seek $500-million in loans and to operate independently, rather than sell at a reduced price, including allowing the government to own equity.
However, if government financing doesn’t come through, Transat appears to be left with an increasingly narrow range of options to stay in the air.