Despite receiving a late and higher-priced competing proposal, “an overwhelming majority” of shareholders in Air Transat (TS, Montréal Trudeau) parent Transat AT have approved a revised buyout offer from Air Canada (AC, Montréal Trudeau), the Montreal-based tour operator revealed in a statement.

It said that 91% of the shareholders present at the meeting, representing 60% of the shares, were in favour of Air Canada’s bid of CAD5 Canadian dollars (USD3.92) per share, a bid that had been recommended by Transat executives.

On October 10, as Covid-19 continued to drag on demand, the privately-owned flag carrier cut its offer by almost 75%, from CAD720 million (USD564 million) to about CAD188.7 million (USD148 million).

Nevertheless, the deal is still pending approval from European and Canadian regulators, the European decision deadline being February 9. The deal is then expected to close in early 2021.

“We are pleased with the shareholder support for this revised arrangement that will create a Montreal-based global leisure leader with the scope necessary to overcome the current turbulence in the industry and to thrive beyond,” proclaimed Jean-Marc Eustache, president and chief executive of Transat in the December 15 statement. “We are more convinced than ever that it is in the best interests of all our stakeholders to join forces with Air Canada.”

Earlier on the same day, Transat disclosed in a separate statement that in late November it had received an unsolicited proposal from a private investor outside the travel industry. It did not identify the investor but said it permitted due diligence to be conducted with access to the company’s financial data.

However, despite the fact that the investor being beyond the travel industry would have led to less regulatory scrutiny, the board did not deem it superior to Air Canada’s bid.

A spokesman for the Fonds de solidarité FTQ development capital fund, one of Transat’s biggest shareholders, told the Canadian Press news agency that the Air Canada deal was “imperfect” but that it voted to back it anyway. He added: “The Fonds took into consideration several factors, including the future of Transat’s head office and jobs in Quebec, as well as our shareholder-savers’ interest.”

While refraining from commenting on the vote, Air Canada did on the same day announce a share offering on the Toronto Stock Exchange, aiming for gross proceeds of approximately CAD850 million (USD667 million). The following day, it said it had priced the public offering of 35,420,000 Class A variable voting shares and Class B voting shares at CAD24 (USD18.83) per share. The measure is expected to close on or about December 30, and the company will use the proceeds to supplement its working capital and other general corporate purposes.