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Transat AT board reaffirms support for takeover by Air Canada, clarifies Péladeau bid

An Air Transat plane is seen as an Air Canada plane lands at Pierre Elliott Trudeau International Airport in Montreal on Thursday, May 16, 2019. Ryan Remiorz/The Canadian Press

Transat AT has reconfirmed its unanimous support for its proposed acquisition by Air Canada while issuing a clarification about a proposal from telecom owner Pierre Karl Péladeau.

The Montreal-based tour company says the deal with Air Canada that was overwhelmingly supported by shareholders on Dec. 15 and received court approval is in the best interests of Transat and stakeholders.

Read more: Transat shareholders approve sale of company to Air Canada

In a news release after markets closed on Tuesday, Transat says a Dec. 22 unsolicited proposal from Péladeau’s investment company Gestion MTRHP Inc. is not supported by binding, fully committed financing.

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It says the offer available if the federal government and regulatory authorities reject the Air Canada takeover is worth $5 per share, not the $6 per share described in some recent media reports.

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Transat also says the proposal lacks the $500 million in financing to support Transat’s 2021 working capital requirements.

Read more: Transat share price rises after Air Canada announces revised takeover bid

Transat previously rejected an earlier offer it determined was not superior under terms of the arrangement with Air Canada.

“This offer, without demonstrated committed financing, appears designed to attempt to adversely influence the regulatory approval process by suggesting that an alternative exists, should the regulatory authorities choose to reject the arrangement between Transat and Air Canada,” stated Jean-Yves Leblanc, president of the special committee of Transat’s board of directors.