Transat shareholders have approved Air Canada’s $720-million acquisition offer, a milestone on a twisting road toward a takeover.
In a special meeting Friday, shareholders of the Quebec-based tour operator voted to accept the $18-per-share bid from the country’s largest airline.
A total of 94.77 per cent of votes cast were in favour, well above the required two-thirds threshold.
The deal will narrow the field of airline competition, securing for Air Canada about 60 per cent of the transatlantic market from Canada and helping the company maintain a firm hold on Montreal air travel.
The takeover is expected to face intense scrutiny from the Competition Bureau and other regulatory authorities.
“Today, we are very confident that we will get the approval of these different regulatory authorities,” said Transat board member Jean-Yves Leblanc, citing “the best advisers that we can have on this planet.”
Chief executive Jean-Marc Eustache, who co-founded Transat’s predecessor in the early 1980s, tamped down fears of higher fares on flights to Europe.
“I have 42 years’ experience in that field. I never saw the price going up,” he said, pointing to competitors on the Montreal-Paris route such Air France, Level Airline and Corsair International. “Plenty of competition, there’s no problem with that.”
Eustache also sought to quell fears of job cuts if Air Canada absorbs Transat, whose subsidiary Air Transat operates a 40-plane fleet.
“You need the pilots, you need the flight attendants, you need the mechanics,” he said. “When you know that it takes between seven to eight crews to fly one plane, that means 14 to 16 pilots to fly one plane. That gives you an idea.
“The people of Air Canada will not take over what the people of Transat are doing today. But for sure you don’t need a CEO,” Eustache added, alluding to his impending retirement.
The approval from shareholders comes after months of turbulence.
Air Canada’s initial proposal of $13 per share prompted other expressions of interest from players such as Group Mach, whose partial bid of $14 a share resulted in a securities tribunal ruling that barred the Quebec developer’s offer.
Meanwhile, Transat’s biggest shareholder at 19.3 per cent, Letko Brosseau and Associates, said it would vote against Air Canada’s offer until the airline raised its bid by $200 million to $18 per share.
Quebec business magnate Pierre Karl Peladeau also hinted last week he planned to make an offer of his own if the vote failed, and to use his 1.6 per cent stake in Air Transat’s parent company to vote against the Air Canada deal, which the former politician had said is “contrary to the public interest.”