Transat A.T. Inc., the parent firm of Air Transat (TS, Montréal Trudeau), has spurned an offer from Montreal-based real estate developer Groupe Mach in favour of one put forward by Air Canada (AC, Montréal Trudeau).

The Canadian leisure holding said in a statement on Thursday, June 27, that its board had unanimously approved a binding agreement wherein Air Canada will acquire all of Transat's outstanding shares for CAD13 Canadian dollars (USD9.91) per share or approximately CAD520 million (USD397 million).

Just prior to the announcement, Groupe Mach, which had proposed buying Transat Inc. for CAD14 (USD10.67) per share, or approximately CAD560 million (USD427 million) in total, said it would no longer need financial help from the Quebec provincial government in order to proceed with the transaction. However, it did state that it would need a window of exclusivity in order to finalise an agreement.

Under the Air Canada deal, which is still subject to regulatory approval, the Air Transat and Transat brands will be maintained and will complement the Air Canada, Air Canada rouge (RV, Toronto Pearson), and Air Canada Vacations brands. In addition, Transat's head office and other key functions will remain in Montreal.

"We are delighted to have reached this definitive agreement to combine Transat with Air Canada to achieve the best possible outcome for all stakeholders," Calin Rovinescu, President and Chief Executive Officer at Air Canada, said. "For shareholders of Transat and Air Canada, this combination delivers excellent value, while also providing increased job security for both companies' employees through greater growth prospects. The Quebec economy will derive maximum advantage of having a Montreal-based, growth-oriented global champion in aviation, the world's most international business."

As part of the transaction, Transat A.T. Inc. said in a separate communique that it would restate its consolidated financial statements and its management's discussion and analysis for the period up to October 31, 2018, as well as the first quarter ended January 31, 2019, and the second quarter ended April 30, 2019, given the need to recalculate the carrying amount of a non-controlling interest in the Trafictours Canada Inc. subsidiary.

As a result of the difference, the liability for the non-controlling interest reported under "Trade and Other Payables" in Transat Inc's Consolidated Statements of Financial Position is undervalued by CAD25.9 million (USD19.74 million) as at October 31, 2018, CAD23.3 million (USD17.76 million) as at January 31, 2019, and CAD20.3 million (USD15.47 million) as at April 30, 2019.

"These undervaluations have no impact on the Consolidated Statements of Income (Loss) for the aforementioned periods as such adjustments are recorded as equity transactions in the retained earnings," it said.

Meanwhile, WestJet (WS, Calgary) has announced that the planned takeover of Canada's second-largest carrier by Onex Corporation had cleared its first regulatory hurdle.

It said in a statement that the Canadian Minister of Transport had given his consent to the buyout on the basis that it does not raise public interest issues as related to national transportation.

According to a definitive agreement signed on May 12, 2019, Onex plans to acquire WestJet's outstanding shares for CAD31 (USD23.11) per share or roughly CAD5 billion (USD3.73 billion) in total.