(Bloomberg) -- Air Canada boosted its takeover offer for Transat A.T. by 38%, or C$200 million ($151 million), securing support from the tour operator’s largest shareholder in the process.
Air Canada said late Sunday it will raise the purchase price to C$18 a share from C$13, bringing the value of the all-cash offer to C$720 million. It has also entered into a lockup and support agreement with Letko Brosseau & Associates Inc., which owns about 19% of Transat’s outstanding shares and had previously opposed the deal.
The move is an attempt to fend off an unsolicited bid from Group Mach Inc., a Quebec real-estate developer that’s offered to buy at least 6.9 million of Transat’s Class B shares for C$14 a share.
Transat’s board has approved the new Air Canada offer. Shares were indicated to open Monday as high as C$14.80, up 25% from Friday’s close of C$11.79.
“We are very pleased with the added stability brought about by Air Canada’s increased bid as supported by Transat’s largest shareholder, Letko Brosseau,” Transat Chief Executive Officer Jean-Marc Eustache said in a statement.
The break fee payable by Transat if the agreement is terminated was also increased to C$40 million from C$15 million.
Shareholders will be asked to vote on the competing offers at a special meeting on Aug. 23.
To contact the reporter on this story: Kristine Owram in Toronto at kowram@bloomberg.net
To contact the editors responsible for this story: Brad Olesen at bolesen3@bloomberg.net, David Scanlan
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