Top shareholder in Air Canada, Transat calls revised buyout offer 'reasonable'

The biggest shareholder in Air Canada and Transat said on Tuesday that AC's revised offer for the Canadian tour operator was "a very reasonable one," given the turmoil in the aviation industry. Peter Letko, a co-founder of investment manager Letko Brosseau, called the deal “good news” but said the firm would wait to see if a rival bidder emerged before committing to the Air Canada offer. On Saturday, Air Canada cut the deal value to buy Transat by nearly 75% to about C$188.7m, down from C$720m, as COVID-19 weighs on travel demand. Transat shares rose as much as 30% as Air Canada’s revised offer raised optimism the deal, once shaken by the COVID-19 pandemic, could be completed. With the pandemic grounding flights globally, Air Canada had faced shareholder pressure to renegotiate the deal, which is still pending approval from European and Canadian regulators. “The price is a long way from what we agreed ... but it’s clear that the industry has gone through a period where it’s really suffered,” Letko said. “If nothing transpires, I think the Air Canada offer is a very reasonable one.” Letko Brosseau owns an 8.69% stake in Air Canada and almost 15% of Transat, according to Refinitiv data. As part of the revised deal, the purchase price could be paid to Transat shareholders in cash or shares of Air Canada, which Letko called interesting.<br/>