Air Canada (AC, Montréal Trudeau) has raised the value of its offer to buy the tour operator Transat, together with its subsidiary Air Transat (TS, Montréal Trudeau), to around CAD720 million dollars (USD545 million), or CAD18 dollars per share (USD13.60), from an earlier offer of CAD13 dollars (USD9.83) per share, the two companies said in a joint statement dated August 11.

The move is a response to Montréal-based real estate developer Group Mach attempting on August 2 to block an Air Canada deal by offering to buy at least 6.9 million (19.5%) class B voting shares in Transat at CAD14 per share. In June, Transat had already accepted Air Canada’s earlier all-cash bid of CAD13 a share, above a CAD14 a share offer from Mach.

Transat's largest shareholder, Letko Brosseau & Associates, which owns or has control of a stake of about 19.3%, has voiced its support for the Air Canada acquisition, the joint statement said, adding that the flag carrier had entered into a lockup and support agreement with the shareholder.

Transat’s board recommended that its shareholders approve the Air Canada deal, which is expected to be completed in early 2020. Also included in the amending agreement is a rise in the breakup fee payable by Transat from CAD15 million dollars (USD11.34 million) to CAD40 million dollars (USD30.24 million) if it opts to terminate the agreement.

"After extensive consultations with Letko Brosseau and several other large shareholders of Transat, we agreed to materially increase our price to ensure the transaction receives the necessary level of support at the Special Meeting of Shareholders of Transat," said Calin Rovinescu, president and CEO of Air Canada, referring to a meeting scheduled for August 23. "We are therefore very pleased to have received Letko Brosseau's strong endorsement for our transaction."

On August 12, Transat said that an administrative tribunal for Canada's financial markets had blocked Mach’s offer to buy a 19.5% stake.