Real-estate developer Group Mach Inc. offered to buy tour operator Transat A.T. with potential support from the Quebec government, topping a friendly proposal by Air Canada that had been criticized by some shareholders.

Mach is offering $14 a share in cash for Montreal-based Transat, $1 per share more than the Air Canada bid. The unsolicited proposal is worth more than $1 billion, including off balance sheet debt, Mach said in a statement Tuesday.

Transat shares were halted after the stock jumped 12 per cent to $13.20 in early Toronto trading, for a market value of about $518 million (US$385 million). Air Canada, the country’s biggest carrier, rose 0.6 per cent Tuesday. It didn’t respond to a request for comment.

In a statement published hours later, Transat took note of the offer and said it’s currently in a 30-day period of exclusive negotiations with Air Canada that will expire around the end of June. There’s no assurance a definitive agreement will be reached on the transaction, it said.

The announcement adds a twist to a deal that has been under close scrutiny by the Quebec government, which wants to ensure the company’s headquarters stay in the province. The offer is conditional on Quebec providing about $120 million in financing, and Mach pledged that no jobs would be lost in the deal. Transat investors including Letko Brosseau & Associates have expressed concerns about the sale to Air Canada.

According to the terms of the Air Canada offer last month, Transat would be able to withdraw from the exclusive negotiations if it received an unsolicited proposal at least $1 a share higher than the Air Canada bid and wasn’t matched by the Montreal-based airline.

Mach, whose real estate holdings include the Sun Life tower and CIBC building in Montreal, would control at least 75% of Transat following the deal. TM Grupo Inmobiliario, a Spanish developer and hotel supplier for Transat in Mexico, would own the remainder.

Transat employs about 5,000 people and offers travel packages to 60 destinations in 25 countries in Europe and the Americas, according to its website. The company has annual revenue of almost $3 billion.

--With assistance from Scott Deveau.