What a lack of transparency on the part of the officers and directors of Transat!
They waited until yesterday morning, the crucial day of the vote on Air Canada’s takeover bid, to inform their shareholders that they had rejected out of hand another takeover proposal, on the pretext that it was not, in their view, superior to Air Canada’s offer.
This has the effect of tarnishing the victory Air Canada won yesterday when the shareholders of Transat once again approved the sale of their company to Air Canada, this time for the modest sum of $ 190 million.
The transaction represents a 73% discount for Air Canada from the $ 720 million initially offered to Transat shareholders before the outbreak of the coronavirus pandemic.
Last October, following a new agreement between Air Canada and Transat management, Transat’s initial offer at $ 18 per share was revised to just $ 5 each.
All that remains is for Air Canada to obtain the approval of Transport Canada and that of the European Commission to officially become the owner of the Quebec flagship of travel vacations and a major competitor in this field of Air Canada.
Given the serious financial crisis affecting the airline industry, it would be surprising to see Transport Canada block the transaction to sell Transat to Air Canada.
Especially since Transat is currently on the edge of the financial precipice due to the dramatic drop in its income during this pandemic period.
Getting the green light from the European Commission is a bigger challenge. European regulatory authorities fear that the acquisition of Transat by Air Canada will reduce supply and consequently increase prices on the 33 routes between Canada and Europe.
Intense negotiations are currently taking place between the European Commission and Air Canada. The decision of the European authorities is expected by February 15.
The acquisition of Transat by Air Canada will unfortunately be to the detriment of Quebec consumers.
With a presence in some sixty destinations in over 25 countries in America and Europe, Transat forces Air Canada and other air carriers to offer a range of vacation packages, hotel stays and air connections at competitive prices.
The day Transat becomes Air Canada property, competition will inevitably soften in the vacation travel sector.
Every time there is a merger of companies, it automatically leads to rationalization. We have to expect job losses at Transat. Transat’s suppliers also risk falling into the wringer of rationalization.
Known for adequately serving its French-speaking customers in the language of Molière, let us keep our fingers crossed so that Transat can keep this good habit.
Air Canada’s bad reputation for services in French does not bode well for Transat customers.
Since Air Canada’s head office is located in Montreal, my little finger tells me that Transat’s head office is likely to turn into a simple administrative headquarters.