MONTREAL -- Quebec's securities tribunal has barred a developer's offer to buy up Transat shares, halting Groupe Mach's bid to block the tour operator's sale to Air Canada.

The decision comes one day after the country's largest airline upped its takeover offer by $200 million in an effort to win shareholder support for its bid to take Transat (TRZ.TO) private.

The new offer would see Air Canada (AC.TO) spend $18 per share, rather than $13, bringing the total offer to about $720 million, up 38 per cent from a previously announced bid worth $520 million.

The would-be deal sent Transat shares soaring by $4.96 or nearly 42 per cent to close Monday at $16.77, their highest price in more than eight years.

Letko Brosseau and Associates -- Transat's biggest shareholder at 19.3 per cent -- has now given formal support to the fresh offer from Air Canada, the airline and Transat said. The investment firm said earlier this summer it would vote against the deal if the price stayed at $13 per share.

Groupe Mach's offer of $14 per share for 19.5 per cent of class B voting shares represented the only rival bid.

The tribunal ruling, which says the bid "constitutes an abusive offer contrary to the public interest," means the Montreal-based company cannot acquire any shares under its scheme and must return to shareholders any stocks already deposited.

The company is also forbidden from using any proxies associated with shares deposited under the plan.

However, Groupe Mach says the bid was in the best interests of Transat shareholders, even if it was unsuccessful.

“Ultimately, the shareholders benefited from our offer,” Groupe Mach president Vincent Chiara told BNN Bloomberg in a Monday interview. “Although, Air Canada also realized that – with or without that judgment – we were getting a lot of traction from shareholders.”

Chiara added that his bid had gained enough traction for shareholders to vote down Air Canada’s bid, had it remained at $13 per share.

“I think Air Canada started to realize that, and that’s when they decided that they should probably pull another rabbit out of their hat,” he said, “and the $18 offer was that rabbit.”

Transat spokesman Christophe Hennebelle said Air Canada's increased offer Sunday came after meetings with the tour company's biggest shareholders, which include the Fonds de Solidarite FTQ, the Caisse pension fund manager and PenderFund Capital Management.

"Obviously it's Air Canada's decision. But it happened after consultations with Transat's major stockholders, including Letko Brosseau, with whom we are now announcing a lockup agreement," Hennebelle said in a phone interview.

Chiara questioned the judgment of Transat's board, calling its endorsement of the original Air Canada bid "disturbing."

"They still need to be accountable to shareholders on why they pushed that $13-per-share offer like they pushed it," Chiara told The Canadian Press.

"God knows had we not did what we did, this deal was done at 13 bucks. There was no other offer. So Air Canada was going to walk away paying $200 million less to this company than they should have or could have."

Chiara said he has received calls from interested parties about making a rival joint bid -- "but I'm not sure we're ready to go there."

"We're not ready to make a decision yet," he said. "But I've got to admit this is a real offer. This is finally a real offer."

Transat has agreed to an increased break-fee of $40 million, while Air Canada's break-fee remains $40 million.

Analyst Doug Taylor of Canaccord Genuity said Air Canada's bid "has a high potential of achieving the necessary shareholder support."

"The deal is still not a foregone conclusion," he added.

Shareholders are slated to vote on the Air Canada offer Aug. 23, which is expected to face intense scrutiny from the Competition Bureau and other regulatory authorities.

Air Canada and Transat command a combined 60 per cent slice of the transatlantic market from Canada, overlap on some sun destinations and maintain a firm hold on Montreal air travel.

Transat has posted net losses two of the last three years, however, with a loss of nearly $20 million forecast for 2019, according to financial markets data firm Refinitiv.

"We view the take-out price is rather generous given Transat's volatile profitability profile," said analyst Mona Nazir of Laurentian Bank Securities in a note to investors.

Increased pressure from Groupe Mach and Letko Brosseau's lack of support pushed Air Canada to up its bid, she said.

"The substantially large increase of about 40 per cent is likely to outstrip any potential bids from Groupe Mach," Nazir added.

Air Transat pilots, represented by the Air Line Pilots Association, said Friday -- before the new offer emerged -- that they support the Air Canada acquisition, citing "greater labour protections and job security."

- With files from BNN Bloomberg