MONTREAL - Group Mach Inc. says it has reached a non-binding agreement with the Quebec government in connection with its bid for Transat AT Inc. (TRZ.TO) and dropped a key financing condition.

The real estate development firm has proposed to acquire all of Transat's shares for $14 each or roughly $527.6 million.

Transat began exclusive talks with Air Canada, set to end on Wednesday, after the country's largest airline made a bid of $13 per share or last month.

However, Mach stepped in with a rival proposal.

Mach did not release any details of its agreement with the provincial government.

It said Tuesday it has submitted an amended version of its proposal removing conditions related to financing from the Quebec government and the execution of support and voting agreements with the

Fonds de solidarite FTQ and the Caisse de depot et placement du Quebec.